Volume gains drive Del Monte earnings

by Staff
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SAN FRANCISCO — Volume gains across the business helped contributed to a 42% rise in net income for Del Monte Foods during the year.

For the year ended May 2, the company had income of $244.3 million, equal to $1.23 per share on the common stock, which compared with income of $172.3 million, or 87c per share, during the previous year. Sales for the year were $3,739.8 million, up 3% from $3,626.9 million during the previous year.

“Del Monte delivered record fiscal 2010 results, establishing a higher level of earnings and setting the new base for sustained growth and performance in fiscal 2011 and beyond,” said Richard G. Wolford, chairman and chief executive officer. “These exceptional results, including e.p.s. growth of over 60% and operating margins expanding by over 350 basis points, were achieved while significantly increasing our marketing investment by over 50%. These results are a testament to the changes we have made and the actions we have taken over the past several years as well as the successful execution of our growth strategy. Our confidence in our future is reflected by the fact that we are announcing today a $350 million, 3-year share repurchase authorization and an 80% increase in our dividend.”

For the fourth quarter ended May 2, the company posted income of $63.7 million, or 32c per share, down 11% from $71.5 million, or 36c per share, during the same quarter of the previous year. Sales for the quarter were $954 million, down 10% from $1.057.4 million during the same quarter of the previous year.

For fiscal 2011, the company expects earnings per share from continuing operations to be $1.38 to $1.42.

“As we exit the fourth quarter of fiscal 2010 and enter fiscal 2011, we feel very good about the health of our business and our long range guidance as we build future performance from this new higher base,” Mr. Wolford said. “For fiscal 2011, we will continue to invest behind our brands and key growth engines while executing additional productivity initiatives. We are confident in our ability to drive long-term sustainable e.p.s. growth.”

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