Frozen food company Birds Eye Foods has announced a rise in net sales for the third quarter ended 26 March 2005, but higher product costs and the cost of brand building initiatives sent income down.

Net sales for the third quarter were approximately $211.6m, up from $206.3 million in the previous third quarter.  Net income for the third quarter of fiscal 2005 was $2.6m down from $5.4m in the year earlier period.

"The increase in net sales is associated with our branded frozen business driven by the company's September 23, 2004 acquisition of the California & Washington company and the company's Birds Eye Voila! product category resulting from product revitalization efforts," the company said.

"Earnings from the increase in net sales were offset by continued higher product costs, consistent with those experienced throughout the industry, and the cost of additional brand building initiatives during the quarter," it said.

 Net sales for the nine-month period were $655.4m, up from $644.5m for the same period a year earlier. Net income for the nine months was $19.1m compared with $4.0m.

"Our acquisition of the C&W business continues to perform as anticipated," said chairman, president and chief executive officer Dennis M. Mullen. "Our earnings for the third quarter, however, continue to be impacted by higher production costs."

"Although we have implemented cost reduction actions and taken pricing actions across many of our products, we have been unable to offset these costs increases and the cost of various promotional programs necessary to address competitive activities," he said.