JP Foodservice's earnings rise 43% Quarter is at low end of market expectations

January 23, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

JP Foodservice Inc. yesterday reported earnings that were at the low end of market expectations for the three months ended in December, but still represented a 43 percent profit jump on continuing operations for the restaurant and institutional food supplier.

The Columbia company said its earnings rose to $3.2 million during the second quarter of its fiscal year, or 20 cents a share, up from 14 cents before a restructuring write-off in the corresponding three months of fiscal 1995. The company's fiscal year ends in June.

"As far as I know, we were right on line with the key analysts," said JP Foodservice chief financial officer Lewis Hay III. "The only one who was sort of out of line was Ron Morrow at Rodman and Renshaw, and he's always a little more aggressive than we are. We came in right where we expected to be."

According to I/B/E/S International Inc., the average estimate of three of the five analysts who follow JP Foodservice was that the company would earn 25 cents a share during the quarter, with a high estimate of 34 cents. A second supplier of earnings estimates, Nelson Research Inc., put the average at 21 cents based on four estimates.

None of the analysts could be reached after JP Foodservice reported the results, after the stock market closed.

The quarter showed the fruit of the company's late 1994 initial public offering, which allowed JP Foodservice to pay down more than $120 million in debt. That cut interest expenses by $2.4 million, allowing the company to post its 43 percent gain in continuing-operation profits with a sales gain of just 11 percent.

Mr. Hay said a small acquisition added about 1 percent to the company's second-quarter sales, which were $302.3 million, bringing the total to $613.1 million for the first half of the fiscal year.

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