Michael Foods quarterly loss at $17 million

Michael Foods suffered a $17 million loss for the first quarter of fiscal year 2017, Michael Foods’ parent company, Post Holdings, reported.

Roy Graber Headshot
Photo by Andrea Gantz
Photo by Andrea Gantz

Michael Foods suffered a $17 million loss for the first quarter of fiscal year 2017, Michael Foods’ parent company, Post Holdings, reported.

The quarter ended on December 31.

The quarterly figure was negatively impacted by a provision for $74.5 million in legal settlements in a class-action lawsuit filed in 2008, which claimed the U.S. egg industry illegally conspired to inflate prices. The company has maintained its innocence, but decided to settle, stating that doing so was “in the best interest of our shareholders, employees, customers and consumers because it effectively eliminates the distraction, expense and exposure of this complex legislation.

Michael Foods during the first quarter of fiscal year 2016 reported a profit of $80.8 million.

Other factors in loss

While the settlement was costly, there were other market conditions that played a role in the company’s poor financial performance during the quarter.

According to a press release from Post Holdings, net sales were $539.8 million for the first quarter, which was a decline of 7.9 percent from the same period of the 2016 fiscal year.

Egg prices, which were higher during early fiscal year 2016 due to an egg shortage brought on by the 2015 outbreak of avian influenza, have since lowered.

Michael Foods not only includes Post’s egg business, but also its potato, cheese and pasta businesses.

Post Holdings’ financial results

As a whole, Post Holdings reported net earnings of $97.6 million for the most recent quarter, which was an increase of 282.7 percent on a year-over-year basis. Post Holdings reported net sales of $1.25 billion, an increase of about $1 million.

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