American Dairy slides on sales outlook for year

LOS ANGELES - Shares of American Dairy Inc., a Beijing-based company that distributes infant formula in China, slipped on Monday after the company lowered its year revenue outlook, expecting a weaker-than-expected seasonal benefit.

The stock declined $6.42, or 19.8 percent, to $26.01 in midday trading.

The company's net income attributable to ordinary shareholders was $11.1 million, or 52 cents per share. That compares with a loss of $20.2 million, or $1.19 per share, a year ago.

Sales rose 94 percent to $72.1 million from $37.2 million.

Sales of milk powder products, which consist mostly of higher margin infant formula products, were approximately $55.9 million, up from $18.1 million a year earlier.

Sales and marketing expenses increased 75 percent to $27.5 million in the third quarter from $15.7 million.

The company forecast full-year 2009 revenue between $270 million and $290 million, down from prior expectations between $330 million to $360 million.0

Chief Financial Officer Jonathan H. Chou said the recent industry data suggest that seasonal strength typically experienced in the fourth quarter may be lower than previously expected. Chou also said fourth-quarter comparisons are particularly difficult due to exceptional growth last year in the wake of the melamine crisis. Milk and milk products from a state-owned dairy that were tainted with melamine, an industrial chemical, were blamed in the deaths and illness of infants in China last year.

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