US pasta maker Monterey Pasta has said it expects to post a first-quarter loss as its results were hit by a rise in raw material costs.
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The company said it expects to post a loss of 1 to 3 cents per share for the quarter, significantly below analysts’ expectations of 3 to 5 cents per share profit.
Monterey Pasta said its first quarter sales are expected to increase 3-5% over the same quarter in 2003, as higher sales from the inclusion of CIBO Naturals, which was acquired by the company in January 2004, were offset by lower sales due to a lost national private label account.
“While the first quarter results were below expectations, we continue to make significant progress on our key strategic initiatives,” said CEO Jim Williams.
“First, our ‘quick-prep’ meal line is performing well and will represent 8% of our sales for the first quarter. With these results, we are moving forward with plans to automate the production of these items and improve profit margins. Second, our CarbSmart reduced carbohydrate line continues to sell well. Third, response to our new ‘meal kits’ program has been positive and we have several new innovative kits to present in the coming months. Fourth, our investment in CIBO Naturals is already proving to be a wise use of our cash. CIBO has significantly surpassed sales targets during their first two months as part of Monterey Pasta.
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By GlobalData“With the initial positive results from these key initiatives, I feel confident that we are building a solid base for the long-term development of our business,” Williams said.
