Diamond Foods Swings To Loss, But Tops View; Shares Up

(RTTNews) - Packaged food company Diamond Foods Inc. (DMND), Tuesday posted a loss for the second-quarter, hurt mainly one-time charges. Nonetheless, adjusted earnings for the quarter improved from last year and trumped analysts estimates by a penny, as did revenues. Following the news, shares of Diamond Foods rose five percent in after-hours trade.

San Francisco, California-based Diamond Foods posted second-quarter loss of $15.1 million, compared to a profit of $10.1 million last year. On a per share basis, loss widened to $0.68 from $0.37 last year.

During the second quarter, Diamond incurred a charge of $8.7 million related to settlement of the securities class action lawsuit and a $7.0 million charge related to a change in the fair value of the Oaktree warrant liability.

Excluding special items, earnings for the three-month period rose to $0.09 per share from $0.05 per share last year. On average, six analysts polled by Thomson Reuters expected earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter was relatively flat at $220.6 million compared to $220.8 million last year. Five analysts had a consensus revenue estimate of $216.75 million for the quarter.

Gross margins for the period improved to 25.4 percent from 22.9 percent, driven by strong performance of Snacks segment, offset by poor results at Nuts segment due to higher tree nut costs.

Moving ahead, Chief Executive Brian Driscoll said, "While we expect to face further headwinds in the Nuts segment in the second half of fiscal 2014, our team remains focused on the execution of our multi-year turnaround strategy and we are confident that we are taking the right steps to position our business for long-term sustainable growth."

DMND closed Tuesday's trading at $29.95, down $0.53 or 1.74%, on the Nasdaq. The stock, however, gained $1.58 or 5.28%, in after-hours trade.