Shares in Diamond Foods rose today (18 December) after the Kettle Chips owner reported underlying first-quarter earnings that were ahead of Wall Street forecasts.

The US snack group reported adjusted earnings per share of US$0.24 for the three months to 31 October. The result was two-thirds lower than a year earlier. However, Wall Street analysts had forecast $0.23 a share, according to a Thomson Reuters poll.

The adjusted EPS, which excluded charges linked to an accounting scandal that hit the business last year and other one-off items, helped Diamond's stock increase 2.58% to $14.32 at 18:05 ET today. Diamond also booked adjusted EBITDA of $31m, against $29.8m a year earlier.

On a reported basis, Diamond filed a first-quarter loss of $10.7m amid charges linked to the investigation into payments to walnut growers that ultimately led to the exit of its CEO and CFO.

Net sales were down 10.1% at $258.5m after a 4% fall in retail sales. Non-retail revenue that more than halved amid a lower supply of walnuts.

However, margins improved as Diamond spent less on promotions.

"Our first quarter results reflect some progress against our new brand strategies, but we continue to face headwinds with respect to walnut supply and a highly leveraged balance sheet," CEO Brian Driscoll said.

"Reduced promotional spending on our snack brands and a shift in the timing of advertising spending to later in the year were the largest contributors to improvement in our margins in the first quarter."

Diamond is looking to move on after an accounting scandal over incorrect payments to growers. The affair led to the exit of its CEO and CFO, the derailment of its bid to acquire Pringles, the restatement of its 2010 and 2011 results and an annual loss in its most recent financial year of $86.3m.

Reflecting on the results for the first quarter of Diamond's new financial year, BB&T Capital Markets analyst Heather Jones said: "A considerable amount of work remains, however, as the company aims to amend grower relations, structurally improve margins and kick-start sustainable branded growth. It also must keep a close, watchful eye over its balance sheet amongst this ongoing transition. There are early signs of hope, and expectations of a more appropriately aligned cost structure, but visibility into top line performance remains very limited. We continue to expect F'13 to be a platform off which to build, and further remain on the sidelines during this time."