US food manufacturer Pinnacle Foods saw its 2010 net profit hit by a reversal of a deferred tax valuation.

The Birds Eye and Aunt Jemima and Swanson manufacturer said yesterday (10 March) that its net earnings for the full year were US$22m for the year ended 26 December, against US$303m in the prior year. However the company added that the 2009 result included a $316m one-time adjustment of the deferred tax valuation allowance.

For the year, net sales were up 48% to US$2.4bn, largely driven by its acquisition of Birds Eye Foods, which added some $893m in net sales over the year.

On a pro-forma basis, net sales were down 4.4% compared to the same period a year ago, with net sales in its North American retail business down 2.4%. Sales in the speciality division were down 13%.

For the fourth quarter, the company recorded $16m in net earnings, against $292m in the same quarter of the previous year, which included the $316 million one-time adjustment of the deferred tax valuation allowance. The company said that excluding the adjustment, net sales would have been up $40m for the quarter.

Consolidated net sales were up 60% during the fourth quarter to reach $662m, with Birds Eye Foods adding some $264m of net sales. On a pro forma basis, net sales were down 4.9% compared to the same period last year, with net sales in North American retail down 5%, which it attributed to “weak category performance”.

Commenting on the results, Pinnacle CEO Bob Gamgort said: “2010 was a year of significant accomplishment for Pinnacle Foods. Our integration of the Birds Eye Foods acquisition is complete and we have already realised $25 million of synergies. In a highly competitive marketplace, we grew or held market share on brands accounting for 66% of our product contribution, re-energised our innovation pipeline, and delivered significant productivity gains.”