SHARES in Kerry Group fell after the food giant marginally cut its full-year earnings guidance and said it was dealing with ongoing problems in its Irish consumer foods sector.
In an interim management statement covering the nine months to the end of September, the Tralee-based company said it now expected to post earnings per share growth for 2012 of between 9pc and 11pc, down slightly from the 8pc to 12pc it had previously indicated.
The company, which is creating 900 jobs at a research plant in Kildare, said it recorded "good organic growth" across all its business during the year so far, but had had to deal with "challenging market conditions in Europe and the continuing competitive consumer foods market situation in Ireland and the UK".
For the year so far, revenue climbed 10.9pc to €4.4bn, while on a like-for-like basis business sales were up 2pc.
Trading profit is up 12.1pc year on year, even as the company dealt with what it described as "unallocated" development costs relating to an internal restructuring that has been going on for some time.
Margins increased 10bps, which all came from the ingredients and flavours (I&F) business, which now drives most of Kerry's profits.
That division increased revenue by nearly 15pc and recorded growth across all of its markets, but especially the US and Asia.
In contrast, the consumer foods business struggled, with the company describing the division's performance as "satisfactory".
"Against a backdrop of competitive, promotionally driven consumer foods markets in Ireland and the UK, Kerry Foods maintained a satisfactory overall business performance, the firm said.
"In Ireland, Kerry's dairy brands progressed well, but brand performance in the meat category was impacted by intense price-driven competition from private label and discounter offerings.
"Sales through independent retail channels were also adversely impacted by such trends," the company added in a statement.
The consumer business here remains "challenging". The group's Denny brand in particular "faced intense competition from heavily discounted private label offerings".
That reflected wider issues in the Irish market where private label goods have seen their market share grow sharply since the downturn.
Looking ahead, the company said it would be concentrating on "developing and fast-growing markets".
Kerry added: "The group's pharma platform will also be further extended in line with global market requirements, with significant investment in science and R&D capability, which will be leveraged globally."
Among other products, Kerry produces the coating used on many drugs capsules.
Kerry was flat in Dublin in early trading, but then trended steadily down after the IMS had been released. By the close the stock had fallen 2.6pc to €40.37. The shares are up more than 50pc in the past 12 months.