Lamb Weston (NYSE: LW) reported Q2 EPS of $0.80, 8 cents better than the consensus of $0.72. Revenue for the quarter came in at $911 million versus the consensus estimate of $897.08 million.

Second Quarter 2019 Highlights

• Net sales increased 11% to $911 million
• Income from operations increased 24% to $174 million; Adjusted Income from Operations(1) increased 21% to $174 million
• Adjusted EBITDA including unconsolidated joint ventures(1) increased 18% to $223 million
• Diluted EPS increased to $0.74 from $0.52, and includes a $0.10 benefit from a lower tax rate as a result of U.S. tax reform, partially offset by a $0.06 decrease related to the acquisition of the remaining interest in the Lamb Weston BSW joint venture
• Adjusted Diluted EPS(1) increased to $0.80 from $0.54; and includes a $0.10 benefit from a lower tax rate as a result of U.S. tax reform

Updated FY 2019 Outlook

• Net sales expected to increase mid-to-high single digits, up from a previous estimate of mid-single digits
• Adjusted EBITDA including unconsolidated joint ventures(1) expected to be $870 million-$880 million, up from a previous estimate of $860 million-$870 million

“We delivered another quarter of strong sales, earnings and cash flow growth,” said Tom Werner, President and CEO. “We’re executing well across the organization and continue to expect the operating environment in North America to remain generally favorable for the remainder of fiscal 2019. As we’ve previously indicated, while we anticipate delivering solid sales and earnings results in the second half of fiscal 2019, our performance will moderate as we begin to lap strong prior year results, face increased cost inflation, ramp up investments in operating, sales and product innovation capabilities, and tackle the challenges arising from a historically poor potato crop in Europe. Despite these headwinds, due to our strong first half performance and operating momentum, we have raised our annual outlook for sales growth and EBITDA.”

“In addition, we’ve recently taken actions that we believe demonstrate our balanced, returns-driven approach when deploying capital,” Werner continued. “First, we completed the purchase of our partner’s interest in our Lamb Weston BSW joint venture in December. Second, consistent with our strategy to differentiate our global supply chain to drive growth, we acquired a frozen potato processor in Australia, which will provide us with additional capacity to serve our customers. Third, we increased our quarterly dividend by approximately 5 percent, enabling us to maintain a dividend payout range of 25 to 35 percent of Adjusted Diluted EPS. And finally, we adopted a $250 million share repurchase program designed to buy back stock on an opportunistic basis. We believe these actions, along with our performance, show our commitment to executing on our strategies to support customers, drive growth and create value for our shareholders over the long term.”

For earnings history and earnings-related data on Lamb Weston (LW) click here.