Del Monte profit up sharply as sales climb

SAN FRANCISCO — Del Monte Foods Co. Thursday posted sharply higher net income for the latest quarter and announced a plan to cut 85 office jobs.

The San Francisco-based packaged food company said its net income for the fourth quarter ended April 30 increased to $57.9 million, or 29 cents a share, from $19.3 million, or 9 cents a share, in the prior fourth quarter. The latest quarter included a gain of 5 cents a share from the sale of a private label soup and infant feeding business and 1 cent a share in earnings from other discontinued operations sold in prior periods.

Earnings from continuing operations came to 21 cents a share.

Sales rose 3.2 percent to $799.2 million.

Analysts surveyed by Thomson Financial had forecast, on average, earnings of 20 cents a share on sales of $858.5 million. Such earnings projections typically exclude items.

Del Monte Foods said it will eliminate 85 jobs, or more than 7 percent of its selling, general and administrative personnel, with cuts in both San Francisco and Pittsburgh.

The company said it expects to incur pretax charges of about $110 million over the next two years from the plan, but also sees higher long-term growth because of costs savings.

For fiscal 2007, Del Monte Foods expects sales growth of 14 percent to 16 percent over fiscal 2006.

The company expects to post earnings from continuing operations of 53 cents to 58 cents per share, including approximately 6 cents of integration expense and about 11 cents to 14 cents of transformation-related expenses.

For fiscal 2006 year, income grew 44 percent to $169.9 million, or 83 cents per share, from $117.9 million, or 56 cent per share last year.

Revenue grew 3 percent to $3 billion, from $2.9 billion last year.