Diamond Foods Q3 Profit Beats Expectations, Shares Gain

Shares of

surged over 3 percent in after-hours trading after the company reported better-than-expected earnings for its fiscal third quarter. The San Francisco, California-based company posted quarterly profit of $6.3 million, or $0.20 per share, versus a year-earlier loss of $105.6 million, or $3.63 per share. Excluding one-time items, Diamond Foods earned $0.23 per share. Its revenue declined 2.5 percent to $186.1 million from $190.9 million. However, analysts were expecting a profit of $0.15 per share on revenue of $195.34 million. The average estimate among 11 Estimize users was for earnings of $0.17 per share and revenue of $197.62 million. Snacks segment net sales slipped 0.3 percent year-over-year to $113.9 million in the quarter, while nuts segment net sales dropped 5.8 percent to $72.2 million. Its gross margin widened to 28.5 percent from 23.6 percent. Adjusted EBITDA climbed 27.2 percent to $30.0 million. "We are pleased with our earnings performance in the third quarter, fueled by margin growth in the Nuts segment and strong Kettle results in North America. Our lower net sales primarily reflect our decision to exit certain high volume, low margin nut SKUs," said Brian J. Driscoll, President and CEO. "While we expect this decision and the effects of foreign exchange to also impact our fourth quarter, our year-to-date results give us confidence to update our annual adjusted EBITDA and earnings outlook for fiscal 2015." The company now expects full-year adjusted earnings of $1.00 to $1.10 per share, versus earlier forecast of $0.95 per share to $1.10 per share. It now projects adjusted EBITDA of $118 million to $123 million, versus earlier outlook of $117 million to $123 million. Diamond Foods shares gained 3.56 percent to $30.00 in the after-hours trading session.