February 17, 2012 / 1:37 PM / 6 years ago

UPDATE 4-Cott shares fall after it reports quarterly loss

* Revenue up 4 pct at $549 million (Adds analyst comment, some detail from conference call, updates market reaction)

TORONTO Feb 17 (Reuters) - Cott Corp, a private label beverage maker, said on Friday steep commodity costs and weak profit margins had pushed it to a quarterly loss, surprising analysts and sending its shares lower.

High resin prices, responsible for $50 million in unforeseen costs in 2011, would likely remain at similar levels this year, Chief Executive Jerry Fowden said, adding that the price of apple juice concentrate held back the results as well.

Fourth-quarter gross profit margin fell to 9.4 percent from 13 percent in the same period a year earlier. Cott expects price increases and operational changes in North America to boost margins this year and next, Fowden said.

“Restoration of our margins will be a long, slow process, and we will need commodities to abate to get to an eventual position we are happy with,” he said during a conference call.

Shares of Cott dropped as much as 10 percent after Cott released its results but the stock retraced much of its decline by late morning, when it was trading about 3 percent lower at C$6.61 on the Toronto Stock Exchange.

Revenue rose 4 percent to $549 million, thanks largely to higher volumes in Britain, where energy and sports drinks drove growth, but there was little change in North America.

UBS Investment Research analyst Greg White said revenue came in well below his expectations. Analysts on average expected revenue of $558 million, according to Thomson Reuters I/B/E/S.

“We believe the commodity cost environment should look more favorable in 2012, and the pricing environment appears to be improving,” White wrote in a research note.

The net loss amounted to $12 million, or 12 cents a share, compared with net earnings of $15 million, or 16 cents, a year earlier.

Excluding items, adjusted net loss came in at $5 million, or 5 cents, compared with earnings of $8 million, or 8 cents.

Analysts, on average, had expected earnings of 4 cents a share.

$1=$1.00 Canadian Reporting by Allison Martell; Editing by Peter Galloway

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