Shares in the food group Goodman Fielder fell sharply as it warned of a downturn in December-half earnings, which prompted fears of a full-year decline.
Addressing shareholders at Friday's annual meeting, managing director Chris Delaney said earnings would be "weighted significantly to the second half" of the 2014 financial year due to a squeeze on margins in New Zealand.
When releasing its 2013 results earlier in the year, the company was less concerned about a December-half downturn, telling shareholders only that earnings would be "weighted towards the second half".
Since then, pressures on its domestic bread-baking arm, along with a higher milk price in New Zealand, have weighed on its prospects.
In particular, the New Zealand dairy arm has been hurt by a rise of more than 40 per cent in farm gate prices for milk from the fourth quarter of fiscal 2013.
"Aggressive competitor wholesale pricing" has meant Goodman Fielder has not been able to make up for lost ground, Mr Delaney told shareholders.
As a result, the pre-tax profit of its NZ dairy arm in the December half is expected to be hit by $8 million to $10 million, which is "very unlikely" to be recovered in the second half.
The bad news follows the difficulties that emerged in Fiji late last financial year when an unexpected rise in the mortality rate at its poultry unit there hit earnings.
There had been a reduction in the mortality rate in Fiji, it said, with the focus now on trying to lift sales to try to limit the adverse impact of a loss of sales in the key Christmas market.
Also weighing on the near-term performance is a decision to double marketing spending in the baking, dairy and grocery divisions, it said.
Renewed nervousness over its earnings outlook caused Goodman Fielder shares to fall to a 69¢ low during trading, but they recovered slightly to close at 70.5¢, a fall of .03¢ or 4.08 per cent for the day.