Higher costs outpace revenue gain

Article Excerpt

SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 390.9 million; Market cap: $15.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products. It also operates dairies in the U.S., Australia and Argentina. Due to recent acquisitions of smaller dairy producers in Canada, the U.S. and Australia, the company’s sales in its fiscal 2019 fourth quarter, ended March 31, 2019, rose 17.9% to $3.24 billion from $2.74 billion a year earlier. Excluding costs related to acquisitions and other unusual items, Saputo earned $125.8 million in the quarter. That’s down 7.0% from $135.3 million a year earlier. Due to more shares outstanding, per-share earnings fell 8.6%, to $0.32 from $0.35. The profit decline reflects higher transportation and warehousing costs. Saputo is still a hold. hold. …