Ben & Jerry’s Latest: Red Ink

Price-conscious consumers have been deserting Ben & Jerry’s ice cream for cheaper brands lately, prompting the company Monday to predict its first quarterly loss since it went public 10 years ago.

The company, known for the flamboyant founders who gave it its name, has suffered declining profits all year long and estimated its fourth-quarter loss at $700,000 to $900,000.

That would be the first red ink for Ben & Jerry’s Homemade Inc. since it first sold stock to the public in 1984. Ben & Jerry’s spokesman Rob Michalak said the company still expects to turn a profit for the full year.

Adding to the bad news, the company also said Monday that recurring problems in a computerized handling system will force it to delay opening a new, more efficient manufacturing plant in St. Albans, Vt., until the middle of next year.

The company’s shares dropped 15% Monday, falling $1.75 to $10 on the Nasdaq stock market.

Ben & Jerry’s President Chuck Lacy said fourth-quarter revenues are expected to be between $30 million and $31 million. That’s down from $31.7 million at the same time last year. Final results for the quarter are not expected until mid-March.

“While our earnings have been negatively impacted in 1994 by the inefficiencies in the company’s production planning, purchasing and inventory management systems . . . the anticipated loss in the current quarter is due primarily to lower than expected sales levels,” Lacy said in a written statement.

An investment banker who has followed Ben & Jerry’s for years was not surprised by Monday’s announcement.

“We think they were taken by their own success,” said Lewis H. Alton, managing general partner of L. H. Alton & Co. in San Francisco.

The exponential sales growth that Ben & Jerry’s enjoyed for a number of years could not be sustained, he said.

“We don’t really see much lack of success. We only see a lot of very good success--success beyond which it could not compete,” Alton said.

The company’s earnings have been below expectations all year. In the first nine months of 1994, the profit was $3 million, just half what it earned the year before.

But up until the fourth quarter, sales had continued to climb, although at a somewhat slower rate than in recent years. Third-quarter sales were $44.8 million, a 14% gain from the third quarter of 1993.

Ben & Jerry’s, which claims 42% of the market in the category of ice cream known as super premium, also has seen increasing competition from manufacturers of lower grades.