Diamond Foods snack sales drive profit higher

An apparently voracious appetite for nuts and popcorn by U.S. consumers drove fiscal second-quarter profit for snack maker Diamond Foods Inc. to more than double year-over-year, the company said Wednesday.

The San Francisco-based company reported profit for the quarter ended Jan. 31 of $6.1 million, or 37 cents a share, up from $2.7 million, or 17 cents a share, a year ago.

Sales grew nearly 13 percent to $150.6 million from $133.8 million the year before.

Analysts surveyed by Thomson Reuters had expected earnings of 31 cents a share on slightly higher sales of $154.2 million.

The company's snack sales also more than doubled to $49.3 million from $19.5 million on strong demand for Emerald nuts and Pop Secret popcorn, the nation's second-largest microwave popcorn brand acquired last year from General Mills Inc.

"Our strategy to invest in our brands, while lowering the company's cost structure, enables us to deliver greater value to retail partners and consumers, which is critically important in today's economy," Chief Executive Michael J. Mendes said in a statement.

For the first half of the year profit grew to $16.8 million, or $1.01 per share, from $11 million, or 69 cents a share, for the same period a year earlier. The current-year period included a charge of 3 cents per share for early retirement of debt left over from the Pop Secret acquisition in the first quarter. It was partially offset, however by the sale of emission reduction credits, the company said.

Sales for the first six months of the fiscal year grew 9 percent to $346.1 million from $318.3 million the year before.

Diamond Foods raised its full-year guidance by 2 cents per share to a range of $1.27 to $1.34, which excludes one-time charges of about 3 cents a share, on sales of $535 million to $565 million. Third-quarter earnings are expected to range between 11 cents and 14 cents per share, company said.

On average, analysts are predicting fiscal third-quarter profit of 13 cents per share, and full-year earnings of $1.32 per share on much higher sales of $605.7 million.

Shares rose 12 cents to close earlier at $22.23, but the weaker-than-expected full-year revenue forecast appeared to disappoint investors. Shares fell $1.23, or 5.5 percent, to $21 in aftermarket electronic trading.