Landec shares fall after company slashes guidance
Landec shares fall in trading after company lowers income forecast due to produce shortage
MENLO PARK, Calif. (AP) -- Shares of Landec, which makes prepackaged food and medical products, fell Friday after it lowered its net income guidance due to a shortage of produce.
THE SPARK: Landec said it expects its fiscal second quarter net income to be about 13 cents a share. Analysts were expecting 16 cents a share, according to FactSet.
For the full fiscal year, it now expects net income to be flat to up 5 percent, down from its original guidance for net income to be up about 20 percent, excluding a $3.9 million adjustment in fiscal 2013.
THE BACKGROUND: Landec sells prepackaged vegetables and tray products that are designed to withstand changes in temperature throughout the supply chain. The company said a recent shortage in produce has forced it to purchase fruits and vegetables on the open market at higher-than-expected prices.
"Profitability during the second quarter has been severely impacted by an industrywide shortage of produce which has resulted in higher-than-projected costs for most of our key produce items," CEO Gary Steele said in a statement. He cited bad weather in vegetable-growing regions in California and Mexico and on the East Coast.
SHARE ACTION: Shares of Landec Corp. fell $1, or 8 percent, to close at $11.40
