Diamond Foods Wipes Out $56.5M in Profit

by Christopher Freeburn | November 15, 2012 1:25 pm

diamond foods gone nuts 300x227 Diamond Foods Wipes Out $56.5M in Profit[1]Investors slammed Diamond Foods (NASDAQ:DMND[2]) shares on Thursday after the company restated its financial results for 2010 and 2011 and said it lost money during the first nine months of this year[3].

The company admitted earlier this year to improper accounting practices that concealed payments made to walnut farmers. The new financial statements cancelled $56.5 million in previously reported earnings, Reuters noted.

Shares of Diamond Foods tumbled more than 21% in afternoon trading as investors absorbed the news.

News of the scandal led to the resignation of Diamond’s top executives. The company is facing possible delisting from the NASDAQ exchange[4]. In the wake of the revelations, it called off its planned acquisition of the Pringles snack brand.

An analyst called the restatement a “first step on the road to recovery” for the battered snack food distributor.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/12/diamond-foods-gone-nuts.jpg
  2. DMND: http://studio-5.financialcontent.com/investplace/quote?Symbol=DMND
  3. lost money during the first nine months of this year: http://www.reuters.com/article/2012/11/15/us-diamondfoods-results-idUSBRE8AE1EH20121115
  4. facing possible delisting from the NASDAQ exchange: http://investorplace.com/2012/06/diamond-foods-misses-deadlines-faces-delisting/

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