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.

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“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.”