CHICAGO – Del Monte Foods Co. (DLM) Thursday said quarterly profit fell as expected as it spent more on marketing and new products.
The largest U.S. canned fruit and vegetable company posted profit of $8.5 million, or 4 cents a share, in the fiscal first quarter ended Aug. 1, compared with $14.3 million, or 7 cents a share, a year earlier.
In June, the company forecast earnings of 3 cents to 5 cents a share, including merger integration costs. Excluding those costs, which amounted to 2 cents a share, the company met the average analyst forecast of 6 cents a share compiled by Reuters Research.
Price increases and cost cuts helped offset higher prices for commodities like tuna and steel, the company said.
Sales rose 2.4 percent to $626 million as strong pet food volume offset lower sales of StarKist (search) tuna.
Del Monte shares were down 3 cents at $10.70 on Thursday on the New York Stock Exchange (search).
The company said it spent about 12 percent more on marketing in the quarter and that it expects that to rise to more than 25 percent increase for the full year,
The company also said it expects full-year profit from continuing operations of 81 cents to 86 cents a share, which includes 6 cents a share of merger integration costs. Analysts on average forecast 89 cents a share. It forecast a 1 percent to 2 percent increase in net sales.
For the second quarter, San Francisco-based Del Monte forecast a 4 percent to 6 percent increase in sales and earnings of 17 cents to 21 cents a share in the quarter, compared with 19 cents a share a year earlier.
Analysts on average forecast 21 cents a share.