Post earnings fall 64% in second quarter

by Eric Schroeder
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ST. LOUIS — Net income at Post Holdings Inc. in the second quarter ended March 31 totaled $10.5 million, equal to 31c per share on the common stock, down 64% from $29.1 million, or 85c per share, in the same period a year ago. This was the company’s second earnings report since it was spun off in February from Ralcorp Holdings.

Net sales during the quarter ended March 31 were $250.5 million, down 3% from $259 million in the same period a year ago. The sales decline primarily reflected an 8% decline in overall volumes, which partially was offset by higher net selling prices.

The company said sales for its Honey Bunches of Oats and Pebbles brands declined 2.4% and 6.7%, respectively, during the second quarter.

“Ready-to-eat cereal category revenues declined approximately 1.5% for the 13 weeks ended March 31, 2012, from the comparable year-ago period,” Post said. “Category volumes, measured in pounds, declined 8% for the 13 weeks ended March 31, 2012. Management believes the category volume decline is largely attributable to higher every day and promoted average prices and increased competition from cereal substitutes such as quick-service restaurants and other breakfast items.”

Capital expenditures in the six months ended March 31, 2012, were $15.8 million, which included about $8.4 million incurred in connection with establishing Post as a stand-alone entity apart from Ralcorp. For the second half of fiscal 2012, Post said it expects total capital expenditures to be in a range of $17 million to $19 million.

For the six months ended March 31, net income was $23.3 million, or 68c per share, which compared with $53.7 million, or $1.56 per share, in the same period a year ago. Net sales eased 3% to $469.8 million from $482.7 million.

Looking to the remainder of fiscal 2012, Post estimated adjusted EBITDA to be between $200 million to $210 million.

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