Del Monte Foods has recorded an increase in profits for the first nine months of the year and upped its EPS forecast for fiscal 2010.
For the nine months ended 31 January, income from operations amounted to US$178.7m compared to $78.9m in 2008.
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The figure includes pre-tax costs of $17m relating to Del Monte’s closed notes offering and tender offer and $21m relating to the refinancing of the company’s senior credit facility.
Net sales increased 8.4% to reach $2.78bn. This was driven primarily by “strong” base-unit volume gains across the portfolio, as well as pricing actions and new product volume growth.
In the third quarter, Del Monte Foods earned $57.2m, a drop from the $59.6m earned in 2008. Net sales increased 7.5% to reach $942.3m.
“Del Monte delivered a strong third quarter, with financial results ahead of our expectations,” said Richard Wolford, chairman and CEO of Del Monte. “Our brands are performing well across the portfolio, driving volume gains and share improvements. We have nearly doubled our marketing investment this quarter versus the prior year to strengthen our key equities.”
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By GlobalDataWolford said he expects fourth quarter net sales and earnings to be down year-over-year, primarily due to the 53rd week included in fiscal 2009.
However, he added: “Based on the over-delivery of results in the third quarter fiscal 2010 and our revised outlook for full-year costs, we are increasing our EPS target range for fiscal 2010. Our expectations of over 40% EPS growth place Del Monte at the top of its peer set.”
For the full year, the company has increased its EPS forecast to $1.07 to $1.11, which includes a total of $0.11 related to refinancing activities. This compares to its previous EPS target of $0.93 to $0.97.
