PENX Q1 EPS Above Jefferies Estimates

Penford Corp.'s PENX Q1 EPS of $0.03 was “$0.17 above our estimate,” Jefferies reports. “Sales increased 8% YoY (vs 2% forecast), though gross and operating margins contracted 300bps and 60bps, respectively,” Jefferies writes. “Operating profits beat our estimates by $0.20 led by an $0.11 beat in Food Ingredients (lower production costs and reduced employee expenses), a $0.07 beat in Industrial Ingredients and $0.02 in corporate & other.” Q1 profits were slightly offset by higher interest expense ($0.02) from the financing costs relating to the Q3 preferred stock issuance and higher taxes ($0.01), Jefferies said. “We are raising 2011E EPS $0.25 to $0.35 and raising 2012E EPS $0.10 to $0.40 to better reflect improved pricing from newly negotiated contracts, reduced raw material pressures and improved plant efficiencies,” Jefferies adds. Penford Corp. closed Thursday at $6.34.