CANADA: US weighs on Saputo Q1 profits
Lower profits from its US division has hit first-quarter earnings at Canadian dairy firm Saputo.
The company yesterday (31 July) reported a 3.8% fall in net earnings to C$121.8m (US$121.1m) for the three months to 30 June. EBITDA dropped 3.1% to C$203m.
A fall in cheese prices in the US hit its business in the market, Saputo said.
Revenue increased $1.7bn amid a "better product mix" of dairy ingredients and a weak Canadian dollar.
However, Saputo booked adjusted earnings per share of C$0.60, which missed analysts' average forecast of $0.66.
Michael van Aelst, an equity analyst at Canadian investment bank TD Securities, lowered his forecast for Saputo's full-year earnings per share for the company's next two financial years.
"We are lowering our estimates slightly to account for the miss in the quarter, a higher tax rate and temporarily higher competitive activity stateside, as slowing export growth leaves more dairy product to supply the domestic market," van Aelst wrote in a note today. "Our EPS estimates drop to C$2.59, from C$2.70 for F2013 and to $2.89, from $2.97, for F2014."
He added: "In our view, Saputo remains a very well-managed company, with solid execution and market positions; but we remain in the soft part of the dairy cycle and, as a result, we do not see a catalyst on the horizon - barring a material acquisition - that will drive Saputo’s shares meaningfully higher."
- Rise of prepared foods in US grocers - analysis
- How are brands organising for e-commerce?
- Hershey results, outlook, M&A - the top takeaways
- Free-from firm BFree Foods - bitesize interview
- More M&A likely at McCormick - editor's viewpoint
- Hain Celestial eyes disposals, forms venture unit
- Kellogg launches Special K breakfast quiches
- Dole faces DoJ probe over listeria outbreak
- Amplify Snack Brands acquires Boundless Nutrition
- Murray Goulburn accused of "misleading" the market