Del Monte Q3 revenue rises 7.2% on Foods acquisition

What happened

Del Monte's fiscal third-quarter revenue rose 7.2% from a year earlier to $1.10 bln. Adjusted diluted earnings per share were $0.50, up from a loss last year. The company credited the Del Monte Foods acquisition and better margins despite cost pressures.

Confirmed

Global impact / market context

The acquisition added scale and higher-profit products, helping Del Monte improve profit per sale even as costs rose. Because revenue of $1.1 bln still missed the $1.16 bln estimate from one analyst, investors may question whether growth is strong enough to justify the stock's recent valuation.

Analyst inference

Del Monte did not give specific financial guidance, leaving investors with less visibility into future revenue and costs. The one available analyst rating is buy, and the median price target of $52.00 sits about 81.6% above the October 27 closing price of $28.63, suggesting optimism.

Analyst inference

What to watch

1. Del Monte did not provide specific financial guidance for the current quarter or full year in its press release, so investors lack company forecasts for revenue, profit, and costs. Confirmed
2. Watch whether cost and foreign currency pressures in fresh and agricultural operations ease, since favorable pricing only partly offset those pressures and could affect future profit per sale. Analyst inference
3. Watch whether the Del Monte Foods acquisition keeps lifting sales and gross profit, because continued contribution would support the diversified earnings mix and improve balance across the portfolio. Analyst inference

Evidence

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