June 7, 2011 / 4:42 PM / 7 years ago

UPDATE 3-Saputo earnings rise on U.S. performance

* Q4 2011 EPS C$0.49 vs Q4 2010 C$0.47

* Revenue rises 7.4 pct

* Takes investment writedown; company says will contest

* Stock closes down 1.3 pct

(Recasts with stock fall, more details)

VANCOUVER, June 7 (Reuters) - Cheesemaker Saputo Inc SAP.TO reported a 3 percent rise in earnings on Tuesday as a tough quarter in its Canadian home market and an investment write-down partially offset a strong U.S. performance.

The company, the maker of Stella cheese and Vachon desserts, earned C$102.5 million ($105.7 million), or 49 Canadian cents a share, in its fourth quarter, ended March 31. That compares with C$99.1 million, or 47 Canadian cents, in the same period a year earlier.

Analysts had expected earnings, on average, of 56 Canadian cents a share, after items, according to Thomson Reuters I/B/E/S.

Saputo’s revenue rose 7.4 percent during the quarter to C$1.49 billion.

The Canadian market was highly competitive and is not growing, Saputo Chief Executive Lino Saputo said on a conference call.

Saputo, which is Canada’s biggest dairy processor, also suffered problems during the quarter with mold on some of its products in its home market.

By contrast, the company had record profitability in the United States, helped by higher cheese prices. Saputo said the average block price per pound of cheese in its U.S. dairy products sector rose to $1.695 in the fourth quarter from $1.465 in the same period a year earlier.

Saputo said it had taken a write-down on a portfolio investment, which cut its earnings before tax by C$11.6 million, or 6 Canadian cents a share.

The write-down followed a May 2011 report by an independent valuator on the fair market value of the investment. The company said it will contest the valuator’s report and “pursue all recourses and remedies available under the law.”

Saputo’s stock, which had risen before the results were released, closed down 1.3 percent, or 61 Canadian cents, at C$46.41 on the Toronto Stock Exchange.

$1=$0.97 Canadian Reporting by Nicole Mordant; editing by Peter Galloway

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