Shares in US company Ralcorp dropped this morning as the company’s third quarter net profit slid and the company reduced its full-year forecast.
Shares in Ralcorp were down 5.56% at US8:31 ET today to US$74.29 a share after the company announced that net earnings for the quarter ended 30 June fell 47% to $28.3m.
The company attributed the declines to some $21.1m losses related to hedge contracts. The company also said that ingredient, packaging and freight costs were approximately $43m higher, with the most significant rises in snack nuts. Most of these rises were offset through pricing adjustments and the addition of an acquired business.
Sales over the period rose 22% to $1.2bn, while organic sales were up 5%. Volumes grew 28%, while the snacks, sauces and spreads business posted a 6% jump in sales helped by higher volumes. Frozen bakery product sales were up 15%, with 5% volume growth.
Gross margin narrowed over the quarter to 24.7% from 25.5%.
The company today also announced the acquisition of Sara Lee’s North American refrigerated dough business for $545m.
In the middle of July, Ralcorp announced plans to spin-off its Post branded cerals arm. At the time it said it would use the proceeds from the move to expand its own label business.
Click here for the full earnings announcement.