Earnings Preview: Del Monte - Analyst Blog

Del Monte Foods Co. (DLM), one of the leading producers and distributors of canned vegetables and fruits in the U.S., is scheduled to report its second-quarter 2011 financial results on Wednesday, December 1, 2010. The current Zacks Consensus Estimate for the quarter is 35 cents a share.                                       

First –Quarter Synopsis

The company posted weak earnings of 29 cents per share for the first quarter of fiscal 2011. The result was below the Zacks Consensus Estimate by $0.09 and was a penny below the prior-year's earnings. Decline in the top-line growth and an increase in the marketing investment hampered the profits during the quarter.

During the quarter, sales at Del Monte declined 1.1% to $804.6 million from $813.7 million in the prior-year quarter. The decline was primarily due to a 1.6% decrease in volume.

First Quarter 2011 Consensus

Analysts surveyed by Zacks expect Del Monte to post second-quarter 2011 earnings of 35 cents a share. The current Zacks Consensus Estimate represents a year-over-year growth of 2.8%. The estimates in the current Zacks Consensus for the quarter range has been constant over the past 30 days.

The current Zacks Consensus Estimate has remained constant over the last 30 days; as none of the 12 analysts covering the stock revised the estimates either upward or downward.

Earnings Surprise History

With respect to earnings surprises, Del Monte has reported well above the Zacks Consensus Estimate over the last four quarters with an average of 45.4%. This suggests that Del Monte has outperformed the Zacks Consensus Estimate by an average of 45.4% in the last four quarters.

Zacks Rank

Based in San Francisco, California, Del Monte Foods Co. currently holds a Zacks #3 Rank, which translates in short-term Hold recommendation. Our long-term rating on the stock also remains Neutral, as we expect the company to perform in line with the broader market.