Diamond Foods Loss Widens, Yet Tops View; Stock Down - Update

(RTTNews) - Diamond Foods Inc. (DMND) on Monday reported a wider loss for the fourth-quarter, hurt mainly by lawsuit charges and weak nuts sales. Excluding one-time expenses, earnings climbed from a year ago and topped Wall Street estimates, as did sales.

Looking ahead to the first quarter, Diamond Foods expects to face significant sales and contribution headwinds including costs associated with the Emerald re-launch and lower walnut supply.

Despite expected increases in tree nut costs, fiscal 2014 is expected to be a year of earnings improvement as additional benefits from the execution of the multi-year turnaround strategy are realized, the company said.

Investors were disappointed with the announcement and shares of the company dropped over 5 percent in after-hours trading on the Nasdaq.

The San Francisco-based packaged food company posted a quarterly net loss of $147 million or $6.71 per share, compared with a net loss of $33 million or $1.52 per share last year.

Results for the quarter included, among other items, $96 million in expenses related to the settlement of the securities class action lawsuit, and a $36 million non-cash impairment to Kettle U.S. other intangible assets.

Excluding items, adjusted earnings for the quarter were $2.3 million or $0.09 per share, compared with $1 million or $.05 per share in the prior year.

On average, seven analysts polled by Thomson Reuters expected the company to report a loss of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter were $200 million, a decline of nearly 11 percent from $224 million a year ago. Analysts expected sales of $192.53 million for the quarter.

While snacks sales climbed 3.3 percent to $117 million, it was offset by Nuts sales that slumped 25 percent to $82.7 million.

The company's stock closed Monday at $23.55, down $0.62 or 2.57%, on a volume of about 1 million shares on the Nasdaq. In after hours, the stock dropped $0.91 or 3.68% at $22.64.