March 10, 2011 / 2:11 PM / in 7 years

UPDATE 1-Dorel Q4 profit up, expects margin pressure

* Q4 EPS $0.76 vs $0.73 year ago

* Rev falls 1 pct to $539.5 mln

* Expects raw material costs to remain high in 2011 (Follows alerts)

March 10 (Reuters) - Canada’s Dorel Industries reported a 4 percent rise in fourth-quarter profit but said high raw material costs, which it experienced in 2010, have not eased in 2011 and are likely to hurt margins.

“Upward pressure on commodities such as steel, resin, cotton and oil will force us to seek price increases,” the maker of bicycles and Safety 1st baby products said in a statement.

Net income rose to $25.2 million, or 76 cents a share, from $24.2 million, or 73 cents a share, a year ago.

Total revenue for the Montreal-based company, whose products include ready-to-assemble furniture, fell 1 percent to $539.5 million.

The company said some of its U.S. businesses that service mass market customers slowed in the second half of the year.

“This left us with a lot of inventory at year-end that we had anticipated selling in the fourth quarter,” the company said.

The company also had to face higher container freight rates in the quarter.

Shares of the company, whose brands include Cosco, closed at C$30.23 on Wednesday on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Roshni Menon)

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