American Italian Pasta Inc. (PLB) Wednesday posted a lower-than-expected quarterly loss excluding one-time items that was helped by cost cutting.

The company's shares were up just over 1 percent in late afternoon trading after gaining as much as 10 percent earlier in the day.

Sue Perram, vice president at Avondale Partners, cited enthusiasm about expected improvements from American Italian's efforts to reduce costs and debt and focus on smaller, profitable customers.

But she also voiced concern about how soon benefits from the company's changes would materialize. "Factors such as pasta consumption trends and competitor reactions are additional uncertainties," she said in a research note.

American Italian, which has been hurt by the now slowing low-carb diet craze as consumers had eschewed higher-carb foods like pasta, cited delays in customer orders, costs from cutting its inventories and restructuring, and weak sales of new low-carb products in posting its loss.

It said sales of reduced-carb products were nearly half of what it had previously expected in the quarter, even after the company spent $3.9 million in marketing to introduce the products.

The net loss was $12.2 million, or 67 cents a share, for the fiscal fourth quarter ended Oct. 1, compared with a profit of $12.8 million, or 69 cents a share, a year earlier.

The Kansas City, Mo.-based company, the largest U.S. dry pasta maker, said in October it would have a loss of 66 cents a share.

Revenue fell 15 percent to $99.2 million.

Excluding one-time items like inventory-reduction costs and restructuring charges, the loss would have been 15 cents a share, less than the average loss forecast of 26 cents a share compiled by Reuters Estimates.

There were no sales to Atkins Nutritionals Inc. (search) of its proprietary low-carb products in the quarter, American Italian said. Atkins Nutritionals, the company behind the Atkins low-carbohydrate diet, said in September it was cutting jobs and had hired a turnaround firm.

American Italian forecast 2005 earnings per share of 80 cents to $1.00. Analysts on average forecast 85 cents a share, according to Reuters Estimates.

The company's shares were up 24 cents at $20.30 on the New York Stock Exchange (search).