ST. LOUIS (AP) -- Post Holdings Inc.'s second-quarter net income fell 64 percent as the maker of Honey Bunches of Oats and Grape-Nuts spent more on advertising and struggled with higher ingredient costs, lower cereal sales and expenses from its spinoff from Ralcorp.
The St. Louis-based company, which spun off from Ralcorp Holdings Inc. this year, reported Thursday that it earned $10.5 million, or 30 cents per share, for the quarter that ended March 31. That's compared with $29.1 million, or 85 cents per share, last year.
Excluding costs related to the spinoff, Post earned 39 cents per share. Analysts in March and April forecast earnings of 48 cents per share, according to FactSet.
Post's revenue dipped to $250.5 million from $259 million.
Like many food makers, Post struggled with higher costs for raw materials, and that took a toll on its profit margin.
The bulk of its problems came from weaker cereal sales. The company said its cereal sales suffered as consumers resisted higher prices and were lured away by increasing options at quick-service restaurants. Starbucks, Subway, Burger King and other chains have recently expanded their breakfast offerings.
Post said it sold 8 percent less cereal by volume, but it partially offset the impact on its revenue by charging higher prices. It sold less of nearly all its cereals, except its Great Gains line, which delivered a 25 percent jump in revenue due to a new advertising campaign.
Shares of the St. Louis-based company fell 94 cents to close at $28 before the company reported on its earnings. The stock rose 11 cents after hours.