(RTTNews) -  Funeral service products dealer Hillenbrand, Inc. (HI: News ) reported Wednesday a decline in third-quarter profit, reflecting a 3.8% decrease in revenues on lower burial demand and a drop in investment income. The company also revealed that it now expects the results for the full year to linger at the lower end of its earlier guidance ranges.

For the third quarter, net income decreased to $25.4 million or $0.41 per share from $26.7 million or $0.42 per share in the previous year.

The results of the latest quarter included antitrust litigation costs of $0.2 million. The prior-year results included litigation costs of $0.6 million and separation costs of $0.1 million.

Excluding items, earnings decreased to $25.6 million from $27.4 million in the year-ago period.

On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share in the third quarter. Analysts' estimate typically exclude special items.

Net revenues for the period dipped 3.8% to $158.7 million from $165.0 million in the third quarter of the prior fiscal year. Analysts were expecting revenue of $155.90 million for the third quarter.

Kenneth Camp, Hillenbrand's chief executive, said, "Burial demand is typically diminished in the third and fourth quarters as a result of the seasonal effect of death trends. This year has been a bit unusual as there was a minimal instance of influenza and pneumonia, resulting in fewer North American burials,"
Camp added that the severity of the recession and uncertain economy apparently made consumers more cost-conscious while taking funeral purchase decisions.

Investment income dropped 56.8% to $1.9 million from $4.4 million, chiefly due to a $1.2 million decrease in the fair value of the investment portfolios of the limited partnerships held by the company.

Gross margin improved to 41.6% from 40.2%, helped by lower cost of diesel fuel and some raw materials. Operating expenses reduced 3.9% to $27.3 million from $28.4 million in the same quarter last year.

For the nine-month period, net income grew to $79.7 million or $1.29 per share from $74.0 million or $1.18 per share in fiscal 2008. Revenue came down to $496.0 million from $519.3 million in the same period last year.

Looking ahead, for fiscal 2009 the company now expects results to hover above the low end of the earlier outlook ranges. Previously Hillenbrand forecast net income to be between $97 million or $1.57 a share and $105 million or $1.70 a share on revenues ranging from $650 million to $670 million. The company had projected adjusted earnings to range from $101 million to $109 million, and $1.65 to $1.78 on a per share basis, for the full year.

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