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New York, NY -- (SBWIRE) -- 11/19/2012 -- Diamond Foods, Inc. (NASDAQ:DMND) is a packaged food company focused on building, acquiring and energizing brands. Diamond specializes in processing, marketing and distributing snack products and culinary, in-shell and ingredient nuts. The Company sells its products to global, national, regional and independent grocery, drug and convenience store chains, as well as to mass merchandisers, club stores and other retail channels.
DMND is off nearly 8% in pre-market action, continuing to feel pressure from its recently restated financial results for 2010 and 2011, which erased $56.5 million in profit. Analysts at Jefferies are weighing on the stock this morning, cutting it to "underperform" from "hold," and slashing its price target by $17 to $10. Technically speaking, DMND has been a dud recently, lagging the broader S&P 500 Index (SPX) by more than 20 percentage points over the past two months, and burning off more than 53% year-to-date. Despite a 2.5% pullback in short interest during the most recent reporting period, there is still plenty of negativity levied against the shares. Short interest now makes up a whopping 38.5% of the equity's float. In fact, at DMND's average pace of trading, it would take more than two months for all these bearish bets to unwind.
Diamond Foods Inc. effectively wiped away $56.5 million in profit from its books Wednesday after it restated two full years of results.Its battered stock fell another 20 percent in after-hours trading on the news.The San-Francisco based snack company is restating its results for 2010 and 2011 after an internal investigation last year found that the company improperly accounted for payments to walnut growers, which skewed its financial results.Diamond suffered mightily from the fallout. Its stock price sank on concerns about the payments, it lost its bid to buy the Pringles brand from Procter & Gamble Co. and it eventually replaced its CEO and chief financial officer over the issue.
The company, which makes Emerald Nuts and Kettle Chips, said Wednesday that the restatements are an important step toward it becoming current in its financial reporting.Diamond and its audit committee determined that grower payments of $20.8 million and $61.5 million previously accounted for in fiscal 2011 and 2012, were not accounted for in the correct periods. The corrections were made in the reports for fiscal 2010 and 2011.The restatement reduced its income before taxes by $17 million in fiscal 2010 and $39.5 million in fiscal 2011.Diamond on Wednesday also reported a net loss of $53.4 million, or $2.46 per share, for the first three quarters of its 2012 fiscal year. That's compared with a restated net income of $23.7 million, or $1.05 per share, in 2011.
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