Maple Leaf profit jumps fivefold

WINNIPEG: Maple Leaf Foods' second-quarter net profit jumped nearly fivefold, helped by price increases and cost-cutting, the leading Canadian food processor said on Thursday.

Maple Leaf, a major hog and poultry packer and baker, earned C$24.6 million ($25.9 million), or 16 Canadian cents in diluted earnings per share, up from C$4.9 million, or 2 Canadian cents a share, a year earlier.

The latest results included costs of C$16.6 million for closing some processing plants.

Excluding these and other items, earnings of 30 Canadian cents a share beat the analysts' average estimate of 21 cents, according to Thomson Reuters I/B/E/S.

"On first blush, (the earnings) look really, really good," Octagon Capital analyst Robert Gibson said.

Maple Leaf raised store prices of its brands, which include Schneiders meats and Dempster's bread, as the cost of raw materials continues to rise.

Closing some meat plants added savings on operations, helping the company's protein group record a higher profit, Gibson said.

Sales fell 3 percent to C$1.24 billion, due mainly to business divestitures, but in line with expectations.

A deadly meat recall in 2008 hammered the company's shares and earnings, but last year it launched an ambitious plan to rebuild profits by modernizing some plants and closing others.

Copyright Reuters, 2011