THOMASVILLE, Ga. (AP) — Flowers Foods Inc.'s shares fell in trading Friday after the bakery company delivered disappointing fourth-quarter results and full-year guidance.
THE SPARK: The company reported after the market closed Thursday that its quarterly net income fell nearly 27 percent to $23 million, or 17 cents per share, from $31.4 million, or 23 cents per share, in the year-ago period. Revenue increased 14 percent to $653.6 million.
That missed the 21 cents per share on revenue of $656.6 million that analysts polled by FactSet anticipated. Flowers Foods also issued 2012 guidance that fell short of expectations.
THE BIG PICTURE: Flowers Foods, like many food companies, has struggled with higher costs for ingredients and production that has cut into its profitability. While most companies have increased prices, that hasn't always offset those pressures completely.
Flowers Foods, based in Thomasville, Ga., makes products such as Nature's Own bread, Tastykake snack cakes and Mi Casa tortillas.
The company declined to comment further on the period.
THE ANALYSIS: D.A. Davidson analyst Tim Ramey said that he disagrees with the company's optimism for growth. Flowers Foods has delivered nearly flat volume growth over the past four years, excluding acquisitions. And it faces a number of challenges in the coming year, such as further increases in commodity costs and a challenging marketplace.
Davidson reiterated his "Underperform" rating on the company's stock. He put this rating in place in Feb. of 2009. Since then, the company's share price has risen 23.6 percent while the S&P 500 has increased 62.4 percent. He has a $14 price target on its shares.
SHARE ACTION: Shares of Flower Foods fell 83 cents, or 4.2 percent, to $18.77 in afternoon trading. Shares have traded between $15.98 and $23.13 in the past 52 weeks.