MONTREAL — Canadian cheese and dairy giant Saputo Inc. missed expectations Thursday even though its net profit increased by 7.2 per cent to $111.8 million in the third quarter.
The Montreal-based company (TSX:SAP) earned 54 cents per diluted share for the period ended Dec. 31. That compares to 50 cents a year earlier when net earnings totalled $104.3 million.
Revenues increased by three per cent to $1.54 billion from nearly $1.5 billion.
Analysts forecast that Saputo would earn 57 cents per share during the quarter on $1.53 billion of revenues, according to Thomson Reuters.
Key factors driving the improved results were a favourable cheese pricing environment, higher U.S. sales and improved selling prices in Argentina.
Offsetting the gains was the result of a strengthened Canadian dollar compared to U.S. and Argentine currencies.
Saputo’s operations in Canada and Argentina earned $125.5 million on $995.2 million of revenues. That compared with $115.4 million on $960.2 million a year earlier.
U.S. operations profits fell nearly four per cent to $61.4 million on $510.2 million of revenues, compared with $63.7 million on $498.1 million in the 2010 period.
During the quarter, Saputo recalled cheese made on a single line at a Quebec processing plant over possible Listeria bacteria contamination. The recall covered nine products or a total of 150,000 kilograms of cheese.
No illnesses were reported, but Saputo said it put the public interests first in voluntarily recalling the product.
Saputo declined to put a total dollar value on the cheese recalled. But industry analysts said the value was more than $1 million.
Saputo is the world’s 12th largest dairy processor and Canada’s largest. It produces, markets and distributes cheese, milk, yogurt and dairy products at 46 plants in Canada, the United States, Europe and Argentina. It is also Canada’s largest snack cake producer.
It has 9,800 employees and earned $382.7 million on $5.8 billion of sales during its 2010 financial year.
On the Toronto Stock Exchange, Saputo’s shares were down 50 cents at $40.75 in afternoon trading.