Martek 4Q profit rises 5 percent on lower costs

AP News
Posted: Dec 16, 2009 4:49 PM

Martek Biosciences Corp., which sells infant formula and dietary supplements, said Wednesday its fiscal 2009 fourth-quarter profit rose 5 percent as better margins and a dip in expenses offset a sales decline.

For the three months ended Oct. 31, the company earned $11 million, or 33 cents per share, up from profit of $10.5 million, or 31 cents per share, a year prior. Revenue fell 3 percent to $87.6 million from $90.4 million.

Analysts polled by Thomson Reuters expected 33 cents per share in profit on slightly higher revenue of $89.2 million, on average.

Sales of its infant formula fell 9 percent to $70.4 million on a mix of destocking by certain customers and a slight decline in the U.S. birthrate, the company said.

Food and beverage sales slid 8 percent to $2.4 million, while non-nutritional product sales fell 32 percent to $914,000. Meanwhile, sales of pregnancy and nursing products, nutritional supplements and animal feeds rose 52 percent to $8.2 million.

Total operating expenses fell 10 percent to $21.2 million on lower research, development, and general and administrative costs. Overall, the gross margin rose to 43.8 percent from 41.3 percent.

For the full year, the company earned $40.6 million, or $1.22 per share, up from profit of $37.7 million, or $1.13 per share, a year prior. Revenue fell to $345.2 million from $$352.4 million.

Looking ahead, the company expects fiscal 2010 first-quarter profit between 29 cents and 32 cents per share on revenue between $85 million and $89 million. Analysts expect higher profit of 33 cents per share on revenue of about $88.1 million, on average.

Overall, the company said it expects modest growth in infant formula revenue, mainly during the second half of 2010, as increases in overseas markets outpace a decrease domestically.

Martek shares fell 48 cents, or 2.6 percent, to $17.76 in after-hours trading after falling 17 cents to close at $18.24 during the regular trading session.