Orlando, FL 12/9/11 (StreetBeat) -- Diamond Foods Inc (Nasdaq:DMND) shares jumped more than 34 percent on Friday, after an analyst said the company would come out of its accounting investigation quickly and without evidence of wrongdoing.Diamond Foods, maker of Emerald nuts, Kettle potato chips and Pop Secret popcorn, is in the midst of an investigation by its audit committee into the way it accounted for payments to walnut growers.
At issue is whether a certain "momentum payment" made in September relates to the 2011 crop, as Diamond has said in documents it sent to growers, or whether it was meant to help make up for an underpayment of the 2010 crop, as some growers have said.
KeyBanc Capital Markets analyst Akshay Jagdale said in a research note that the chances of a restatement of the company's costs related to the payment was low, and that Diamond would likely still be able to carry through its plan to acquire Pringles from Procter & Gamble (NYSE;PG) even though the deal was delayed because of the probe.
"We believe the ongoing investigation will reveal that Diamond has properly accounted for the various payments it makes to growers," Jagdale said.
Diamond's deadline for filing its quarterly report is Monday, Jagdale said, noting that there was a good chance Diamond would miss the deadline.
Diamond shares were up $9.17, or 34.5 percent, at $35.71 on the New York Stock Exchange.
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