Saputo Q3 Revenue Rises, Profit Falls

Saputo (TSE: SAP) third-quarter profit fell from a year ago as the Canadian cheese and dairy maker faced labor shortages, supply chain disruptions and inflationary pressures.

Revenue & Earnings

Revenue came in at C$3.901 billion for Q3 2022, an increase of 3.7% from Q3 2021. The increase is due to higher international market prices for cheese and dairy ingredients and higher domestic selling prices.

Meanwhile, profit for the quarter ended December 31, 2021, amounted to C$86 million (C$0.21 per diluted share), down from C$210 million (C$0.51) in the prior-year quarter.

On an adjusted basis, the Montreal-based company earned C$0.33 per diluted share, C$0.22 less than a year ago.

CEO Commentary

Saputo chairman, president, and CEO Lino A. Saputo said, “Throughout this past quarter, our teams demonstrated resiliency by continuously adapting to changing market conditions, maintaining a laser focus on the health and safety of our employees, and taking decisive actions in running our operations and serving our customers. In this dynamic environment, we will continue to actively monitor inflation and aggressively drive pricing initiatives while taking the necessary steps to improve productivity and customer fill rates.”

Wall Street’s Take

Earlier this month, Desjardins analyst Chris Li kept a Buy rating on SAP with a C$37 price target. This implies 29.6% upside potential.

The rest of the Street is bullish on SAP with a Strong Buy consensus rating based on four Buys and one Hold. The average Saputo price target of C$36.80 implies 28.9% upside potential to current levels.

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