Central Garden & Pet Swings to Loss

Fourth-quarter results widely miss Wall Street's profit projections.
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Central Garden & Pet

(CENT) - Get Report

was in the doghouse Wednesday after swinging to a fiscal fourth-quarter loss against Wall Street's upside expectations.

The Walnut Creek, Calif.-based company, which makes pet supplies and lawn-and-garden products, said it lost $1.7 million, or 2 cents a share, on revenue that ticked down 4.6% to $401.3 million. In the year-ago quarter, Central made $6 million, or 8 cents a share.

Analysts polled by Thomson Financial were looking for a profit of 3 cents a share on revenue of $397 million.

Shares plummeted $1.39, or 21.6%, to $5.04 in recent trading Wednesday.

Helping to erode the bottom line was dwindling revenue from other manufacturers' products, for which the company operates as a distributor. This figure plunged by 16% year over year to $59.5 million. Sales from its own branded products, which constitute the bulk of its revenue stream, saw a 2% decline to $342 million.

Among the report's few bright spots were sales from Central's own garden-segment products, which added 2% from last year. But the rest of the segment saw a 23% revenue decline, and the company's pet-supplies business saw all-around top-line slides that forced that segment's operating income to tumble 45% to $17.3 million.

In September, the company withdrew its just-issued preliminary upside outlook for the fourth quarter, citing unfavorable "weather, grain pricing, and other factors."

For the fiscal year, Central about halved its income to $32.3 million, or 45 cents a share, vs. 2006. Analysts were seeking 51 cents a share. Sales were up 3.1% to a slightly-better-than-expected $1.67 billion.

"Some of our operations are not performing well," said Chief Executive William Brown in a press release. "We have significant work to do."