By Rod Nickel
Oct 30 (Reuters) - Canadian food processor Maple Leaf Foods on Wednesday reported lower-than-expected results for the third quarter, hurt mainly by weakness in its meat business.
Excluding special items, the company, which is undergoing a major restructuring, posted a loss of 1 Canadian cent per share, compared with a year-earlier profit of 13 Canadian cents.
Analysts on average had expected earnings of 8 Canadian cents a share, according to Thomson Reuters I/B/E/S.
The Toronto-based company, one of Canada’s biggest pork processors and bakers, said revenue slipped 2.5 percent to C$1.15 billion ($1.10 billion). Analysts had forecast C$1.2 billion.
Shares of Maple Leaf fell 1.5 percent to C$15.07 in early trading.
Maple Leaf’s results missed expectations mainly because of poor performance in the meat division, said analyst Robert Gibson of Octagon Capital.
“This is a very challenging period of transition for the Maple Leaf organization, as the short-term impact of volatile protein market conditions, combined with the significant cost of change, has been material,” Chief Executive Officer Michael McCain said in a statement.
Maple Leaf is carrying out a multiyear program to upgrade its meat operations by modernizing some plants and shutting down others as it seeks to boost profits and better compete with U.S. rivals.
Third-quarter net income from continuing operations fell to C$14,000, or a loss of 2 Canadian cents a share to common stockholders. The company posted earnings of C$11.4 million, or 6 Canadian cents a share, a year earlier on that basis.
Maple Leaf began an auction last week for its 90 percent stake in Canada Bread Co Ltd. It targeted Mexico’s Grupo Bimbo, one of the world’s largest bread makers, and private equity firms, as potential buyers, according to several people familiar with the matter.
In August, Maple Leaf struck a deal to sell its Rothsay rendering business to Darling International Inc for C$645 million.
Canada Bread also said earlier this week that it would sell its fresh pasta business Olivieri to Spain’s Ebro Foods SA for C$120 million.