Imperial Sugar earnings climb despite drop in sales

by Jeff Gelski
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SUGAR LAND, TEXAS — Imperial Sugar Co. posted net income of $15,700,000, equal to $1.41 per share on the common stock, in the first quarter ended Dec. 31, 2006, which compared with $11,986,000, or $1.14c per share, in the previous year’s first quarter. A carryover of higher prices derived from last year’s tight domestic supply drove the favorable earnings.

Net sales for the quarter were $226,998,000, which compared with $253,986,000 in the previous year’s first quarter. Domestic sugar volume decreased 21.3% for the quarter while domestic prices increased 10.7%. A restoration of capacity in the industry, which followed hurricanes in Louisiana and Florida that affected competitors, caused lower volume levels for Imperial Sugar.

Prices in the quarter were higher across all channels that the company serves. Higher retail and food service prices reflected the ramp in price increases and the ability of Imperial Sugar to maintain prices in some channels.

A reduction in energy costs positively affected gross margin. Imperial Sugar said it expects refined sugar prices to continue to decrease through the remainder of the fiscal year. The company also expects energy costs to remain lower than the prior year and expects raw sugar prices for the balance of fiscal year 2007 to be below levels experienced in fiscal year 2006. Because of these factors, Imperial Sugar said it has a profit outlook for the fiscal year that is superior to historical averages.

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