Post Holdings Inc. (POST) Monday reported a lower profit for the second quarter, mainly as revenues dropped reflecting lower prices. Shares of the cereal maker slipped more than five percent after both earnings and revenues for the quarter came in below Wall Street's expectations.
Post Holdings, the maker of breakfast cereals like the Raisin Bran, Honeycomb and Honey Bunches of Oats, said sales for the second quarter dropped to $248.2 million from $250.5 million last year. Analysts polled by Thomson Reuters expected revenues of $255.73 million for the quarter.
Average selling prices for the quarter declined 4 percent, but were partially offset by volume increase of 3 percent.
Gross margins for the quarter declined by 300 basis points to 41.3 percent, reflecting unfavorable product mix and higher trade spending.
Selling, general and administrative costs dropped 140 basis points to 28.2 percent, due mainly to lower advertising and promotion costs.
Post Holdings, which was spun off from the private food company Ralcorp Holdings last year, reported a second-quarter profit of $4.3 million or $0.13 per share, down from $10.5 million or $0.30 per share last year.
Adjusted earnings dropped to $0.19 per share from $0.39 per share last year. Analysts expected earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Last week, St. Louis, Missouri-based Post Holdings agreed to buy Hearthside Food Solutions' private-label and branded cereal, granola and snack business for about $158 million in cash. The company expects to complete the deal by June.
POST is currently trading at $44.56, down $2.56 or 5.42%, on the Nasdaq.
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