Did food giant Del Monte (NYSE:DLM) bite off more than it could chew when it acquired assets from Heinz (NYSE:HNZ) last year? That question lingered in the air this week when Del Monte announced quarterly profits that were 23% below year-ago levels. The acquisition may have helped fatten sales, but overhead more than doubled, reducing the company's profitability.

The worrisome part of this equation is that, excluding the expenses of integrating the acquisition, quarterly earnings were unchanged from the year before and sales were nearly flat. It's the same story for the full year, where an average of the company's expected reported earnings of between $0.74 and $0.78 per share provides for little growth from last year's $0.76. Again, it's hard to see any benefits from the acquisition.

The bright spot in the earnings picture is that the restructuring burden will continue to lighten over the next few years. But integration costs are not the only bitter aftertaste of the acquisition. Del Monte still needs to revitalize a variety of underperforming brands and seemingly dissimilar products -- from tuna fish to baby food to cat food, among others -- that it acquired from Heinz. For example, StarKist tuna's U.S. market share had already dropped 9% in the five years before Del Monte took over the brand.

If Heinz and all its financial muscle couldn't turn around these brands, then it takes a giant leap of faith to believe that a company like Del Monte will. After all, its market cap is only about one-seventh that of Heinz, and its sales are about a quarter of the far bigger food giant.

Del Monte may be able to savour the sweet taste of success if its marketing and product innovation efforts bear fruit. CEO Richard Wolford may just be able to pull it off. As president of the packaged food division of Dole (privatized since March 2003), he helped introduce, in the 1980s, a successful juice business and the popular fruit-and-juice bars.

Whether feast or famine is in Del Monte's future remains to be seen. For now, though, an investor might want to be cautious about stepping up to the company's plate.

Carla Pasternak welcomes your feedback at cpasternak@mtroyal.ab.ca