Del Monte Posts 3.5% Rise in Profit

Del Monte Foods Co. said Thursday that profit for its fiscal second quarter climbed 3.5%, as price increases helped offset inflationary pressures on costs.

However, the San Francisco-based supplier of StarKist tuna and Kibbles ‘n Bits pet food said higher energy and logistics costs would hurt earnings for the rest of the fiscal year.

For the quarter ended Oct. 31, Del Monte had net income of $41.6 million, or 20 cents a share, up from $40.2 million, or 19 cents, a year earlier. The results included $4.2 million, or a penny a share, in costs from integrating brands acquired from H.J. Heinz Co. in 2002.

Excluding that charge, the earnings matched the average forecast of analysts surveyed by Thomson First Call.

Sales rose 6.9% in the latest quarter to $846.6 million from $791.6 million, helped by new product introductions and higher prices and volumes.

Del Monte said higher-than-anticipated energy and logistics costs would continue to put pressure on earnings. The company said its own price increases would result in revenue higher than previously forecast.

Del Monte now expects sales to grow 2% to 3% in the fiscal year ending in May, and per-share earnings from continuing operations of 76 cents to 81 cents.

Its shares fell 24 cents to $10.43 on the New York Stock Exchange.