Del Monte’s strong sales offset costs
Del Monte Foods Co., maker of Meow Mix cat food, StarKist tuna and canned fruit, posted a smaller-than-expected drop in profit as it offset higher raw material and fuel costs with strong pet food and fruit sales and with price hikes.
Del Monte, like other food companies, has been squeezed by higher corn costs from a surge in ethanol production, but increased prices have helped to offset those pressures.
Earnings for the fiscal first quarter that ended July 29 fell to $3.5 million, or 2 cents a share, from $6.2 million, or 3 cents, a year earlier.
Analysts on average had expected the company to earn 1 cent a share, according to Reuters Estimates.
“Both pet and consumer performed well,†Del Monte Chief Executive Rick Wolford said. “However, increased cost pressures from fish, as well as grains, fats and oils, did impact our operating income results.â€
Sales rose 11.8% to $753.5 million, topping analysts’ average forecast of $711.68 million, according to Reuters Estimates.
Shares of the San Francisco company fell 22 cents to $10.76.
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