Del Monte swings to loss in fiscal 1st quarter

The San Francisco-based company, which distributes food and pet products, said it lost $10.1 million, or 5 cents per share, in the three-month period ended July 27. That compares with a profit of $3.5 million, or 2 cents per share, in the year-ago period.

Revenue rose 16 percent to $726.2 million from $626.8 million.

Analysts surveyed by Thomson Reuters expected, on average, a loss of 4 cents per share on revenue of $747.4 million.

"I am pleased with the company's quarterly topline performance driven by strong volume, primarily in consumer products, as well as effective pricing actions and successful new product sales," said Richard G. Wolford, chairman and CEO of Del Monte Foods. "However, our businesses continue to be negatively impacted by inflationary costs pressures which further accelerated during the first quarter.

"Combating cost increases through pricing actions and productivity gains remains a critical priority, and we believe we are on track to offset costs in the back half of fiscal 2009," he added.

Consumer product sales rose 20.6 percent to $383.5 million in the fiscal first quarter from $317.9 million in the year-ago period, fueled by an increase in demand for at-home meals. Sales of pet products rose 10.9 percent to $342.7 million from $308.9 million in the year-ago period.

The increases were fueled by increased pricing as well as new and existing product volume growth.

Del Monte also said it expects full-year earnings per share at the lower end of its guidance of 58 cents to 62 cents per share, a range that was offered in June.

However, the company now predicts sales growth of 6 percent to 8 percent, compared with a previous forecast for 5 percent to 7 percent growth. The new forecast implies revenue between $3.37 billion and $3.43 billion for fiscal 2009.