ST. LOUIS (AP) — Ralcorp, which announced it would buy Sara Lee's North American refrigerated dough business Tuesday, said its third-quarter net income fell 47 percent because of an impairment charge and higher expenses.
The company earned $28.3 million or 50 cents per share, in the quarter. That's down from $53 million, or 95 cents per share, a year earlier.
Ralcorp said its quarterly results include American Italian Pasta Company, Sepp's Gourmet Foods Ltd., J.T. Bakeries Inc. and North American Baking Ltd. The businesses were purchased during fiscal 2010's second half.
Acquisitions added about 20 cents per share to the quarter, mostly from American Italian Pasta. The buyouts are expected to add approximately $1 per share to full-year results.
Third-quarter selling, general and administrative expenses rose to $157.4 million from $116.3 million.
Removing a $32.1 million impairment charge and other items, adjusted earnings were $1.15 per share.
This missed the $1.20 per share that analysts predicted, according to a FactSet survey.
Revenue for the three months ended June 30 improved to $1.17 billion from $962.4 million, helped by acquisitions, increased prices and volume gains in many categories.
Revenue just edged out topped Wall Street's expectations.
Ralcorp said sales for its frozen bakery products division climbed 15 percent, while snacks, sauces and spreads rose 6 percent. Pasta unit sales, not including American Italian Pasta, gained 4 percent. Sales of branded cereal products edged up 1 percent, while sales of other cereal products increased 10 percent.
Ralcorp Holdings Inc. announced last month that it planned to spin off cereal maker Post Foods to focus on building its generic foods business. It acquired the company four years ago from Kraft Foods Inc. for roughly $1.7 billion.
Post is the third-largest U.S. maker of name-brand cereals, with products such as Honey Bunches of Oats, Grape Nuts and Post Raisin Bran.
While the St. Louis company works on spinning off Post Foods, Ralcorp announced Tuesday that it is buying Sara Lee Corp.'s North American refrigerated dough business for $545 million. The unit includes private label toaster pastries, crescent rolls, pizza and pie crusts and basic and specialty biscuits that are packaged for and sold to retailers.
The sale is expected to close by the end of 2012.
For the year, Ralcorp maintained its forecast for adjusted earnings between $5.20 and $5.35 per share.
Analysts expect earnings of $5.31 per share.