SUGAR LAND, Texas (AP) — Imperial Sugar Co. said Friday that it lost $16 million in the most recent quarter, hurt by competition from other sugar companies as well the rising cost of raw sugar.
The news caught analysts by surprise. They had predicted a profit of 46 cents per share, but the loss amounted to $1.35 per share. A year ago the company posted a loss of $5.7 million, or 48 cents per share.
Revenue plummeted 25 percent to $197 million from $261 million, missing analysts' expectations for $224.3 million.
In morning trading, Imperial Sugar shares plunged 58 percent, or $13.47, to $9.72.
The company blamed the revenue loss on lower sales at a Gramercy, La., refinery in which it owns a stake. It said it was able to raise some prices on customers, which helped revenue, but not as much as it would have liked because of competition from U.S. and Mexican rivals. CEO John Sheptor called the inability to raise prices on customers "the principal driver of the quarter's disappointing results." The company's fiscal third quarter ended June 30.
Like many companies, Imperial Sugar is paying more for the raw materials it needs to make and transport its goods. Sugar is currently trading around 28 cents per pound, down from about 35 cents earlier this year but up from about 18 cents a year ago. Sheptor noted that the U.S. Department of Agriculture had attempted in April to lower the cost of raw sugar with changes to import quotas, but sugar costs have rallied back up since then. Sheptor said he expects only "little relief" on the cost of raw sugar in the current quarter, which lasts through September.
Imperial Sugar also said that its manufacturing costs did not improve over the year. A Georgia refinery that was rocked by an explosion in 2008 is operating at just 75 percent of its previous capacity.
"The company is reviewing potential operating and capital improvements, particularly in the utilities, raw sugar melt and water management areas of the refinery, to begin addressing mechanical reliability in these operations," Sheptor said in a statement.
Imperial, based in Sugar Land, Texas, processes and sells sugar under the Imperial, Dixie Crystals and Holly brands. It has struggled throughout the recession, losing money in all but two quarters since the start of 2008.