Willamette Valley Vineyards has seen a fall in its net profit in the first quarter of the year despite a rise in revenues. The company said this was principally because of unusually high margins experienced in the prior year period.

Willamette Valley reported a net profit of US$88,759, or US$0.02 per basic share on revenue of US$2,375,078 in the three months ended March 31, 2005 as compared to a net profit of US$125,521, or US$0.03 per share on revenues of US$1,843,626 for the same period in 2004.

Gross margins in 2005 were in line with expectations at 46%, as compared to 52% in the prior year period.

Total sales increased 29% over the prior period and gross profit increased 13% (US$129,029) over the prior year period.

This increase was exceeded, however, by an increase in selling, general and administrative expenses of 29% ($202,658) over the prior year period. As a consequence of the increase in expenses, operating income declined as compared to the prior year period.