Del Monte Foods income up 15% in quarter
February 28, 2008
by FoodBusinessNews.net Staff
SAN FRANCISCO — Del Monte Foods Co. posted strong results for the quarter ended Jan. 28 in part as a result of strong volume growth and net pricing actions.
Net income for the third quarter was $53.3 million, equal to 27c per share on the common stock, up 15% from $46.5 million, or 23c per share, during the same quarter of the previous year. Net sales were $1,001.1 million, up 10% from $907.2 million during the same quarter of the previous year. The sales growth was primarily a result of volume growth in the Consumer Products segment.
"We delivered another quarter of strong top-line performance, driven by solid volume growth, share performance and new product success combined with effective execution," said Richard G. Wolford, chairman and chief executive officer. "However, our company continues to experience aggressive cost input increases, primarily reflecting rapidly accelerating commodity costs as well as higher fish costs, both of which continue to pressure earnings. To combat these pressures, in addition to driving costs out of the company, we have since the beginning of fiscal 2008 announced pricing across the vast majority of the businesses — including a second pricing action of the fiscal year in our pet categories and a recent pricing action in fruit. We believe these pricing actions, combined with our cost reduction programs, transformation initiatives and innovation execution, will successfully combat these margin pressures and continue to build the long-term health of Del Monte."
Operating income in the Consumer Products segment was $65.3 million, up 25% from $52.4 million during the same quarter of the previous year. Net sales in the segment were $624.8 million, up 13% from $551 million during the same quarter of the previous year.
For the nine months ended Jan. 28, the company posted net income of $82.7 million, or 41c per share, up 9% from $75.9 million, or 38c per share, during the same period of the previous year. Net sales for the nine months were $2,692.7 million, up 9% from $2,474.8 million during the same period of the previous year.
For the full year 2008, Del Monte said it is increasing its net sales growth target to 7% to 9% above $3,414.9 million during the pervious year. The previous target was growth of 5% to 7%. The company is maintaining its earnings per share from continuing operations target of 64c to 68c.