Saputo Inc.'s (fourth-quarter earnings came in well ahead of year-earlier results and beat analysts expectations by a penny, helped by stronger results in both its Canada, Europe and Argentina, or CEA, dairy products sector and its U.S. dairy products sector.
Improved CEA results reflect operational efficiencies, a more favorable dairy ingredients market and improved results from its Argentinean operations, though a C$3.4 million charge for costs to close a Brampton, Ont. dairy-processing plant and consolidate its Toronto-area distribution activities took a bite out of results. Its U.S. dairy products sector benefited from operational efficiencies and lower ingredient costs.
Canada's largest dairy processor earned C$99.1 million or 47 Canadian cents a share, up from C$69.2 million or 33 Canadian cents a year earlier.
The Thomson Reuters mean estimate was for a profit of 46 Canadian cents.
Revenue of C$1.38 billion was down from C$1.46 billion a year earlier and down from the C$1.47 billion analysts were projecting. A stronger Canadian dollar reduced revenue by about C$105 million.
For all of fiscal 2010, which ended March 31, Saputo's earnings rose 37% to C$383 million or C$1.83 a share, while revenue was up slightly to C$5.81 billion. The Thomson Reuters mean estimate was for fiscal 2010 earnings of C$1.82 a share on revenue of C$5.93 billion.
Saputo makes cheese, milk, yogurt, dairy ingredients and snack cakes.
The company said its goal remains to pursue growth internally and through acquisitions, noting its Canadian dairy-products division will continue to invest in projects to boost capacity in the specialty cheese facilities. It said its European dairy-products division expects fiscal 2011 to pose a challenge to obtaining milk supply at prices competitive with the selling price of cheese.
Some analysts see excessive cheese inventories resulting in ongoing cheese-price volatility for at least two to three more quarters in the U.S.
Source: Dow Jones Newswires
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