Wednesday, Darling International Inc. (DAR), a food processing by-products recycling company, reported a net loss for the fourth quarter, hurt by a goodwill impairment charge related to a single reporting unit, lower prices for finished products, decreases in both volume and yield of raw material and higher energy prices.
The company posted a net loss of $13.9 million or $0.17 per share, compared to net income of $14.4 million or $0.18 per share in the prior year quarter. The result for the latest quarter included a non-cash pre-tax goodwill impairment charge of $15.9 million.
Excluding the goodwill impairment charge, net loss would have been $3.7 million or $0.04 per share for the latest quarter. On average, 8 analysts polled by Thomson Reuters expected the company to earn $0.11 per share for the fourth quarter. Analysts' estimate typically excludes special items.
The company fourth quarter net sales declined to $148.5 million from $175.4 million in the same quarter of 2007, hurt by lower finished product prices, reduced purchases of finished product for resale and decreased raw material volume. Six analysts had a consensus revenue estimate of $153.96 million for the fourth quarter.
Darling International chairman and CEO, Randall Stuewe, said, "We are very pleased with our record earnings for fiscal 2008. Our fourth quarter results were significantly impacted by the global economic downturn. We witnessed a significant collapse in demand for our finished products which resulted in lower market values and reduced raw material from our suppliers who were also impacted."
For fiscal year 2008, the company reported net income of $54.6 million or $0.66 per share, compared to $45.5 million or $0.56 per share in the previous year. Annual net sales increased to $807.5 million from $645.3 million in the preceding year, due to higher finished product prices.
Analysts expected the company to report earnings of $0.94 per share on revenue of $810.27 million for the year.
DAR closed Wednesday's regular trading session at $4.43, up 11 cents or 2.55%. However, in the after-hours, the shares lost 31 cents or 7.00%.
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