By Maria Armental
Diamond Foods Inc. swung to a profit in the second quarter on
improved sales in the U.S. that offset lower sales in the U.K. and
the impact of a stronger dollar.
The company raised by five cents the low end of its projection
for the year that ends in July, saying it now expects a profit of
95 cents to $1.10 a share, in line with the consensus of $1.03 a
share, according to analysts surveyed by Thomson Reuters.
The San Francisco company--which sells potato chips, popcorn and
nut snacks under such brands as Pop Secret and Kettle U.S.--was
founded in 1912 and went public in 2005.
Last month, it bought a majority stake in Netherlands-based
Yellow Chips, which makes vegetable and organic potato chips.
Wal-Mart Stores Inc., which operates Wal-Mart and Sam's Club
stores, remains its largest customer, with more than 10% of sales,
according to Diamond Foods regulatory filings.
For the three-month period ended Jan. 31, Diamond Foods reported
a profit of $11.2 million, or 35 cents a share, compared with a
year-earlier loss of $15.1 million, or 68 cents a share. Excluding
legal expenses and other items, Diamond Foods' profit was 35 cents
a share, versus 12 cents a share a year earlier.
Sales rose 4% to $229.7 million.
Analysts surveyed by Thomson Reuters had projected a profit of
25 cents a share on sales of $236.5 million.
Gross margin improved to 26.6% from $25.4% for the year-earlier
period.
Snacks sales, which includes the Kettle and Pop Secret brands,
rose 3% to $120.4 million.
Nuts segment sales, including the Diamond of California and
Emerald brands, rose 5% to $109 million.
Shares rose nearly 2% to $28 in recent after-hours trading.
Through Thursday's close, the company's stock had fallen nearly
10% over the past 12 months.
Write to Maria Armental at maria.armental@wsj.com
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