Managing costs enabled frozen food manufacturer Overhill Farms Inc. to report sharply higher profits in its fiscal first quarter on Friday, despite slightly lower net revenues.

Los Angeles-based Overhill Farms reported net income of $2.5 million (16 cents per share), compared with $1.6 million (10 cents) a year earlier. Net revenue for the provider of custom frozen foods to the food service, retail and airline industries fell 2.6 percent to $55.3 million. Gross profit margins grew to 14 percent from 11 percent.

"Our strong first quarter earnings, despite a slight downturn in revenues, reflect the company's strengths in product development, production and quality control, along with our close attention to managing our costs, which is especially important in the current economic environment," Chief Executive James Rudis said in a statement. The company is putting greater emphasis on growing its retail and food services sectors since sales to its airline customers have fallen.

Overhill Farms shares were down 37 cents, or 8 percent, to $4.10 in morning trading on the NYSE Alternext exchange.

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