Dry pasta producer American Italian Pasta Co. (AIPC) reported Tuesday an increase in fourth-quarter profit, despite a decrease in revenues, helped both by higher gross margins and a 41% decline in operating expenses. On a per share basis, earnings came in above the Street view by five cents.
For the fourth quarter, net income more than doubled to $15.8 million or $0.73 per share from $7.3 million or $0.36 per share reported in the same period last year. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share in the fourth quarter. Analysts' estimate typically excludes special items.
Revenues for the period decreased 8% to $149.1 million from the prior-year quarter. Five analysts were expecting revenues of $153.16 million.
Segment-wise, Retail revenues dipped 3% to $118.7 million from $122.7 million, mainly due to a 7.7% decrease in average selling prices, partly offset by volume increases of 4.5%. Institutional revenues shrank 23%, to $30.4 million from $39.4 million, mainly attributable to lower average selling prices and decline in volume. The volume decrease is mainly because of bid eligibility changes necessitating small business participation in certain government contracts, challenges to the company's customers in the food service industry, and lower per-unit revenues on certain pass-through manufacturing agreements.
Gross profit edged up 0.7% year-over-year to $41.0 million from $40.7 million, and gross margin increased to 27.5% from 25.1% reported in a year earlier quarter.
Other operating expenses came down 41% to $17.5 million from $29.8 million in the fourth quarter of 2008, primarily related to professional fees incurred during 2008 towards the preparation of 10-K filings coupled with the 2008 impairment loss related to certain brands that the firm planned to extract from under-performing markets.
For the full year, net income surged to $88.3 million or $4.10 per share from $19.1 million or $0.99 per share in fiscal 2008. Total revenues grew 10% to $628.16 million from $569.19 million last year, reflecting a 17% increase in revenue growth in the retail market. Analysts were looking for earnings of $2.85 a share on revenues of $630.64 million for the full year.
American Italian Pasta noted that fiscal year 2009 consisted of 53 weeks of operations compared to 52 weeks in fiscal 2008.
AIPC is currently trading at $30.44, up $0.89 or 3.01%, on the NASDAQ.
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