Excluding special items such as acquisition expenses, the company earned $1.11 per share in the latest quarter. The acquisition expenses totaling $12.8 million were related to Ralcorp’s purchases of J.T. Bakeries Inc., North American Baking Ltd., Sepp’s Gourmet Foods Ltd. and its pending buyout of American Italian Pasta Co.
Net sales in the third quarter fell 3% to $962.4 million from $994 million.
Profit contribution in the Branded Cereal Products segment totaled $54.1 million, down 21% from $68.3 million in the same period a year ago. Net sales in the segment totaled $242.7 million, down 8%.
“The decrease from last year was driven by lower net selling prices due to increased product promotions,” Ralcorp said. “Current year volume by weight was up 3% for the quarter.”
In the company’s Other Cereal Products segment, profit contribution fell 20% to $22 million from $27.6 million, while sales fell 6% to $197.6 million from $211.3 million.
“The decrease was driven by the effects of cereal volume declines as a result of narrowing price gaps due to significant branded promotions in the category, as well as slightly unfavorable selling price varieties (largely due to established pricing formulas with certain customers),” Ralcorp said. “These decreases were partially offset by a 12% volume increase in nutritional bars.”
Third-quarter profit contribution in the Frozen Bakery Products segment eased 6% to $17.5 million from $18.7 million. Net sales were virtually unchanged at $162.2 million, which compared with $162.1 million in the same period a year ago. Ralcorp attributed the profit shortfall to lower pricing and an unfavorable profit mix, partially offset by favorable raw material costs driven by flour and packaging.
Profit contribution in the Snacks, Sauces & Spreads segment rose narrowly to $35.9 million from $35.6 million on a 1% gain in sales to $359.9 million. Ralcorp said incremental sales from acquisitions were partially offset by small declines in the company’s base business.
Companywide for the nine months ended June 30, Ralcorp had net earnings of $166.9 million, or $3.02 per share, down 21% from $210.5 million, or $3.74 per share. Nine-month net sales were $2,919.3 million, up from $2,908.7 million.