Branded food and pet products producer Del Monte Foods Co. (DLM) reported Thursday a profit for the first quarter that edged up from last year, despite a marginal sales decline on weakness in Consumer business. Earnings per share from continuing operations topped analysts' consensus by two cents. The company also backed its earnings forecast for fiscal 2011.
"Our margins were strong in Q1, as we delivered on our productivity savings and improved our overall product mix, while we continued to invest in key brands," said Chairman and CEO Richard Wolford.
The San Francisco, California-based company reported net income of $59.4 million for the first quarter, up from $58.6 million in the year-ago quarter, while earnings per share remained flat with last year at $0.29.
Income from continuing operations for the quarter were $59.9 million or $0.29 per share, compared to $58.9 million or $0.30 per share in the prior-year quarter.
On average, ten analysts polled by Thomson Reuters expected the company to have earned $0.27 per share in the first quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 1.1% to $804.6 million from $813.7 million in the same quarter last year, and also missed eight Wall Street analysts' consensus estimate of $829.47 million.
The company noted that overall unit volume declines negatively impacted the total net sales by 1.6% as non-retail and retail volumes dropped.
Segment wise, sales from consumer products for the quarter were $377.3 million, down 6% from last year, while pet product sales grew 3.5% to $427.3 million from a year ago.
"We are not satisfied with our first quarter Consumer sales, but expect performance will strengthen in the second half as competitive and category performance return to historical levels and as we deliver growth through the key holiday seasons," Wolford added.
Operating margin for the quarter contracted 10 basis points to 14.8% as higher gross margins were offset by the increase in selling, general and administrative expenses as a percentage of sales.
Looking ahead to fiscal 2011, Del Monte continues to expect earnings from continuing operations in a range of $1.38 to $1.42 per share, up from adjusted earnings per share of $1.30 reported in the prior year. Analysts expect the company to report earnings of $1.41 per share for the year.
However, net sales for the year is now projected to grow 1% to 3% over fiscal year 2010 net sales of $3.74 billion, compared to prior expectations of a 2% to 4% growth. The Street is currently looking for full-year 2011 revenues of $3.85 billion.
DLM closed Wednesday's regular trading session at $13.16, down $0.07 on a volume of 2.66 million shares, higher than the three-month average volume of 2.12 million shares. In the past 52-week period, the stock has been trading in a range of $8.92 to $16.14.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.