Treehouse Foods, Inc. (THS) share price has produced solid gains in 2008, recently posting a new 52-week and all-time high above $31. The analyst community is bullish on the company, with the next-year estimate projecting 12% earnings growth.

Company Description

TreeHouse Foods, Inc. operates as a private label food developer and manufacturer servicing retail customers in the United States. Treehouse was spun off from Dean Foods in June of 2005 and has a market cap of $902 million.

Quarterly Results

TreeHouse is approaching its third-quarter earnings announcement, scheduled for Nov 4, but if the company’s second-quarter results, reported on Aug 4, shareholders will be pleased.

Revenue was up to $367.4 million, a 44% increase from last year. When stripping out growth from acquisitions, revenue was up 6.6%. When removing one-time items, earnings came in at 31 cents per share, ahead of analyst estimates by one penny.

Consistent Results

It was the fourth time in four quarters that TreeHouse has surprised and beaten estimates, a demonstration of the company’s ability to produce solid results in a challenging environment.

Commodity Exposure

Higher input costs have been an issue for many food companies over the last year as commodities have rallied against a weak dollar. Company CEO Sam Reed addressed this issue, saying that “Our margins were negatively effected by rising commodity costs, but pricing plans put into place during the second quarter will help drive margin growth over the second half of the year.”

Analyst Estimates

The analyst community is bullish on Treehouse, with the next-year estimate pegged at $1.75 per share, a 12% earnings growth projection.

The Chart

Shares of THS have logged a solid performance thus far in 2008, climbing from less than $21 to a recent high above $31. A longer-term trend line has been supporting prices along the way, take a look below.

Content Courtesy: Zacks Investment Research

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