Ralcorp Holdings, US manufacturer of own label goods and frozen bakery products, has reported that sales in its first quarter increased by US$58.7m, or 13%, due to recent acquisitions in its bakery segment and price hikes. However, the company posted lower earnings during the period.
Earnings before tax and equity losses totalled $17.9m, compared to $21.4m a year ago, while net earnings were $2.1m lower than the first quarter of last year. Diluted earnings per share were $0.28 compared to $0.32 a year ago.
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Net earnings were dented by a $17.9m non-cash loss on the company’s forward sale contracts, compared to a non-cash gain of $8m in last year’s first quarter.
Price increases to offset rising costs restored the company’s gross margin, Ralcorp said. Ralcorp reported that overall ingredient and packaging costs increased by about $2.5m, but the effects were offset by reduced freight and energy costs. The rise in ingredients costs is expected to continue to rise, Ralcorp said, with a greater impact on profitability in the second half of fiscal 2007.
