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Del Monte Earnings Drop 62%

September 01, 2006|From Bloomberg News

Del Monte Foods Co. said Thursday that its fiscal first-quarter profit fell 62% and warned that the current quarter's profit would fall as low as 5 cents a share because of costs to integrate acquisitions.

San Francisco-based Del Monte said net income in the quarter ended July 30 fell to $6.2 million, or 3 cents a share, from $16.2 million, or 8 cents, a year earlier. Revenue rose 9.3% to $674.1 million.

Del Monte said costs related to the purchase of pet food brands Meow Mix and Milk-Bone earlier this year would cut 7 cents a share from profit from continuing operations in the period. Revenue on the same basis is forecast to rise 15% to 18%.

The company has been making acquisitions and streamlining operations in a bid to increase revenue and become more efficient.

Del Monte said it planned to focus on improving customer service and supply chain manufacturing to reduce costs and inventory levels.

The company was expected to earn 22 cents a share in its second quarter, the average estimate of six analysts surveyed by Thomson Financial, which doesn't disclose the parameters of its estimates to Bloomberg News.

Del Monte a year earlier reported net income of 22 cents a share in the period and profit from continuing operations of 18 cents.

Shares of Del Monte rose 29 cents Thursday to $11.10.

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