American Dairy 2Q Profit Climbs 59 Percent

SEATTLE (AP) — American Dairy Inc., a Beijing-based company that distributes infant formula, milk powder, rice and other products in China, said Friday its second-quarter profit rose 59 percent as costs fell and customers bought more of the company's more lucrative baby formula.

Earnings for the three months that ended June 30 climbed to $7.6 million, or 40 cents per share, from $4.8 million, or 27 cents per share in the same period last year.

Net income from continuing operations increased 26.2 percent to $4.3 million, or 24 per share. The company said its profit was better in part because of lower costs, including the cost of fresh milk, and because more of its business was devoted to higher margin infant formula products.

Sales rose 10 percent to $41.2 million from $37.3 million, a year earlier. The company said new package labeling requirements for dairy products in China interrupted sales in the quarter.

The company, which operates in China through its Feihe Dairy subsidiary and others, reiterated full-year revenue guidance of $330 million to $360 million.

Shares fell $1.12, or 3.5 percent, to close at $30.86.