Imperial Sugar (IPSU $9.84 -13.35) reported a third quarter loss of
$1.35 per share, $1.69 worse than the Capital IQ Consensus two estimate of
$0.34.
Revenues fell 24.5% year/year to $197 million versus the $224.3 million
consensus.
Higher raw sugar cost which along with lower volumes reduced gross margin was
the primary reason for the loss in the current quarter. "Our inability to
increase prices in the face of higher raw sugar costs because of competitive
pressures from domestic and Mexican sources was the principal driver of the
quarter's disappointing results. Raw sugar purchased during the quarter was
priced largely against the March and May futures contracts, which peaked near
$40 per hundredweight prior to the USDA import quota announcement in early
April.
The subsequent decline in the raw sugar futures market which occurred after the
quota announcement was only temporary and the raw market has rallied back to
near the same level. Our raw sugar costs in the fourth fiscal quarter should see
little relief, while sales prices thus far in the fourth quarter have only
improved modestly."






