DLM 2009 Q1 Earnings

Before the opening bell sounded on June 11, branded food and pet food maker Del Monte Foods Co. (DLM) made it known that the company’s profits during the 4Q advanced on higher pricing and lower taxes. The company also issued guidance for fiscal 2010 ahead of analysts’ expectations.

During the most recent quarter, Del Monte recorded net income of $71.5M, or $0.36 per share, in contrast to last year’s 4Q profit of $50.4M, or $0.25 per share, an increase in earnings of more than 41%. Income from continuing operations advanced as well, climbing from $40.7M, or $0.20 per share, to $68.8M, or $0.35 per share, a jump of more than 69%.

Quarterly sales for Del Monte also surged during the period, jumping from $875.8M to $1.06B, an increase in revenues of more than 21%.

"The strength of our top-line combined with strong productivity savings exceeded cost increases, funded increased marketing investment, and drove solid expansion of operating margins and EPS for the quarter," stated Richard Wolford, Chairman and CEO at Del Monte Foods.

On average, analysts were looking for Del Monte to post quarterly earnings of $0.26 per share on overall revenues of $956.6M.

Within the company’s operating units, Del Monte’s consumer products witnessed net sales of $568.8M, an increase of more than 20% year-over-year, helped mainly by increases in pricing across the board.

Additionally, the company’s pet products line saw revenues surge to $488.6M, nearly a 22% jump in sales year-over-year based on higher volume sales, along with marginal increases in their product pricing.

For the fiscal year ending May 3, Del Monte observed net income increase from $133.1M, or $0.66 per share, to $172.3M, or $0.87 per share, a jump in annual earnings of almost 30%. Meanwhile, earnings from continuing operations advanced to $147.7M, or $0.74 per share, compared to last year’s annual earnings of $117.7M, or $0.58 per share.

Annual sales for Del Monte came in at $3.63B, up more than 13% from the previous year’s annual revenues of $3.2B. In the meantime, analysts were looking for yearly earnings from Del Monte of $0.66 per share on total sales of $3.52B.

Looking ahead, the company is looking to post yearly earnings from continuing operations between $0.76 and $0.80 per share. Estimates are based on the company’s allocation of capital in marketing investments increasing between 30% and 40% over 2009’s budget.

Del Monte is also looking to post higher sales growth in the range of 4% to 6% over last year’s sales totals of $3.63B. Upon calculations of the projected sales growth, numbers for the company should come in between $3.78B and $3.85B in annual revenues.

Analysts are looking for the distributor of food and pet products to record annual earnings of $0.75 per share on total sales of $3.66B for the fiscal year 2010.

By the close of the June 11 trading session, shares of DLM were up nearly 9%, adding $0.67, to conclude the day at $8.32 per share.