Analyst Mitchell Pinheiro says poor results have reversed the positive momentum achieved during the last two years. He says lower branded cake and bread volumes, along with some margin erosion, is likely to continue at least into the next quarter. Pinheiro notes the company also faced higher ingredient costs, specifically cocoa and sweeteners, as well as higher medical and pension expenses.
He tentatively lowered his $2.05 fiscal 2003 (May) earnings per share estimate to $1.75. He hopes to gain more clarity, and will adjust earnings per share estimates following Tuesday's 10 am EST conference call.