CHICAGO – Higher prices and new products helped Del Monte Foods Co. (DLM) post higher sales and profit for its latest quarter, though the maker of canned fruit and vegetables said energy costs will hurt its full-year bottom line.
The San Francisco-based maker of Contadina sauces, Starkist tuna and Meaty Bone dog biscuits earned $43.9 million, or 22 cents a share, for the second quarter ended Oct. 30, compared with $41.6 million, or 20 cents a share, a year ago.
On a continuing operations basis, the company said it would have earned 21 cents a share.
Sales came in at $882.3 million, a 4.2 percent gain on the back of "increased pricing and volume growth from new products, partially offset by expected volume loss associated with price increases," the company said. Sales of consumer products were up just over 7 percent while pet product sales decreased 4 percent.
The average estimates of analysts polled by Thomson Financial had been for Del Monte to earn 19 cents a share on sales of $854 million.
While the company said that it expects sales growth at the higher end of previously announced range of 1 percent to 3 percent, for the full fiscal year, costs — particularly energy costs — will weigh on the bottom line.
Del Monte said that it now expects earnings to come in at the low end of a 75 cent to 80 cent a share range, versus the 56 cents it earned on a continuing-operations basis in fiscal 2005 and a Wall Street target of 75 cents.