Seeking Alpha
Long/short equity, deep value, special situations
Profile| Send Message|
( followers)  


  • The company missed earnings and shares crumbled.
  • We stand by our long-term buy thesis for the company.
  • Anticipated the aggressive acquisition strategy and felt acquisition costs clouded the quarterly results.

Shares of Post Holdings (NYSE:POST) tumbled nearly 18% today on a poor earnings report. The quarter was abysmal on the surface. Earnings for fiscal 3Q came in at a $0.30 loss, versus expectations of a positive $0.27. Revenue marginally beat expectations. Driving the selloff is a downward revision for full year 2014 EBITDA guidance. But the food division also saw sales down 3.4% y/y as cereal demand weakens.

However, that's where the acquisition strategy is a positive and should help diversify its revenue stream. 3Q revenues were $633 million, compared to $375 million in the same quarter last year. EBITDA was $87.8 million in 3Q (including $37.8 million from acquisitions) compared to $31.8 million in the same quarter last year.

We covered Post in July of last year and since then shares are down nearly 25%. At the time, we stated that having the current CEO, Bill Stiritz, was a long-term positive, noting,

...CEO Bill Stiritz has a history of setting up companies to be acquired. He did this when he was Chairman & CEO of Ralston Purina before it was acquired by Nestle in 2001.

Source: Update: Post Holdings Earnings