July 28, 2016 / 11:45 AM / 3 years ago

Maple Leaf Foods shares hit record after swing to profit

(Reuters) - Canadian meat processor Maple Leaf Foods (MFI.TO) shares hit an all-time high on Thursday after the company reported a quarterly profit that slightly topped estimates, boosted by lower operating costs and increased prices.

A sign for the Maple Leaf food processing plant is seen in Toronto August 21, 2008. REUTERS/Mark Blinch

The company, whose brands include Schneiders, recently completed a program started in 2010 to boost earnings by shutting some plants and modernizing others.

“The scale and extent of our financial improvement is a testament to the success of our transformation strategy,” Chief Executive Michael McCain told analysts.

Maple Leaf shares jumped 4.2 percent in Toronto, touching a record high of C$30.73.

With the company back in the black, it is considering all options for deploying capital, including expansion in the United States and investments in vegetable protein, snack lines and sustainable meat, McCain said. But he added that it is in no hurry to make big acquisitions.

“We’re not going to be elephant hunters,” he said.

Adjusted operating earnings for the meat products segment rose to C$62.9 million ($47.8 million) in the second quarter ended June 30, from C$17.7 million a year earlier.

The company, which is one of Canada’s biggest pork processors, reported net earnings of C$31.4 million, or 23 Canadian cents per share, compared with a loss of C$7.5 million, or 5 Canadian cents, a year earlier.

On an adjusted basis, Maple Leaf earned 32 Canadian cents per share, 1 Canadian cent above analysts’ average estimate.

Maple Leaf, whose agribusiness unit supplies livestock to the meat products group, said total sales rose 4.1 percent to C$854.6 million.

Analysts on average had expected revenue of C$847.4 million, according to Thomson Reuters I/B/E/S.

Reporting by Rod Nickel in Winnipeg, Manitoba and Arathy S Nair in Bangalore; Editing by Sriraj Kalluvila and Sandra Maler

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