By Rod Nickel
(Reuters) - Canadian food processor Maple Leaf Foods on Wednesday reported lower-than-expected results for the third quarter, hurt mainly by weakness in its meat business.
Excluding special items, the company, which is undergoing a major restructuring, posted a loss of 1 Canadian cent per share, compared with a year-earlier profit of 13 Canadian cents.
Analysts on average had expected earnings of 8 Canadian cents a share, according to Thomson Reuters I/B/E/S.
The Toronto-based company, one of Canada's biggest pork processors and bakers, said revenue slipped 2.5 percent to C$1.15 billion ($1.10 billion). Analysts had forecast C$1.2 billion.
Shares of Maple Leaf fell 1.5 percent to C$15.07 in early trading.
Maple Leaf's results missed expectations mainly because of poor performance in the meat division, said analyst Robert Gibson of Octagon Capital.
"This is a very challenging period of transition for the Maple Leaf organization, as the short-term impact of volatile protein market conditions, combined with the significant cost of change, has been material," Chief Executive Officer Michael McCain said in a statement.
Maple Leaf is carrying out a multiyear program to upgrade its meat operations by modernizing some plants and shutting down others as it seeks to boost profits and better compete with U.S. rivals.
Third-quarter net income from continuing operations fell to C$14,000, or a loss of 2 Canadian cents a share to common stockholders. The company posted earnings of C$11.4 million, or 6 Canadian cents a share, a year earlier on that basis.
Maple Leaf began an auction last week for its 90 percent stake in Canada Bread Co Ltd . It targeted Mexico's Grupo Bimbo , one of the world's largest bread makers, and private equity firms, as potential buyers, according to several people familiar with the matter.
In August, Maple Leaf struck a deal to sell its Rothsay rendering business to Darling International Inc for C$645 million.
Canada Bread also said earlier this week that it would sell its fresh pasta business Olivieri to Spain's Ebro Foods SA for C$120 million.
($1 = C$1.0447)
(Additional reporting by Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty and Lisa Von Ahn)