Posted: Wednesday, December 3, 2008, 5:42 p.m., EST

Bolstered by an 18.7 percent increase in pet product sales for its second quarter, Del Monte Foods Co. of San Francisco has raised its expectations for its fiscal year 2009 ending May 3.

The company now expects sales for the year to grow between 8 and 10 percent over fiscal year 2008. It had an earlier forecast growth of between 6 and 8 percent.

The company reported pet product sales of $409.1 million for its second quarter ended Oct. 26, compared to $344.6 million in the year-ago period. Del Monte attributed pet product sales growth, which outpaced its overall sales growth rate of 11.5 percent for the quarter, to pricing actions for pet food and pet snacks, new product volume (primarily from Meow Mix product introductions) and existing product volume growth primarily due to promotional activity for its dry pet foods and offset slightly by the pricing actions.

Operating income for the pet products unit increased 2.7 percent to $45.7 million in the quarter, in which higher ingredient costs ate into sales gains.

Year-to-date, Del Monte posted operating income of $61.1 million on sales of $751.8 million for its pet product business, compared to operating income of $88.4 million on sales of $653.5 million in the year-ago period.

Overall, Del Monte reported net income of $50.4 million on sales of $901 million for the quarter, compared to income of $25.9 million on sales of $808.2 million in the year-ago period.

Year to date, the company posted net income of $40.3 million on sales of $1.6 billion, compared to income of $29.4 million of sales of $1.4 billion.

During the quarter, the company also recognized a $29.6 million gain from the sale of its seafood business to Dongwon Industries Co. Ltd. of Korea. That deal also allowed Del Monte to pare its long-term debt by $300 million to $1.54 billion. <HOME>