McCormick 1Q profit up despite higher costs
Sparks, MD, United States (AHN) – McCormick reported better-than-expected earnings for the first quarter on Tuesday despite higher material costs and continuing weak demand in Europe. The company maintained its full fiscal forecast.
Net income for the period ended Feb. 28 was $76.8 million, or 57 cents a share, up $67.9 million, or 51 cents, for the same quarter a year ago.
Sales rose 2 percent to $782.8 from $764 million in the previous year mainly because of aggressive cost-saving steps the Maryland-based company undertook to offset increased prices of materials and packaging.
Revenue from the consumer business, which accounted for more than half of first quarter sales, remained unchanged.
In the Americas, revenue rose 3 percent due to increased prices, and stronger demand for slow-cooker seasoning mixes, products from subsidiary Zatarain’s, and items sold to warehouse clubs.
Sales in Europe, Middle East and Africa fell 10 percent becauseof unfavorable volume and product mix. In the Asia-Pacific region, revenue grew 11 percent, fueled by strong performance in China.
In the industrial business segment, all regions posted growth for an increase in quarterly revenue of 6 percent.
Food manufacturers in the Americas, particularly in Mexico, demanded more spices during the period, bringing sales up 7 percent.
Demand from quick service restaurants in Europe, Middle East and Africa combined with higher prices to improve industiral revenue by 3 percent. In Asia, sales rose 5 percent.
“We are operating effectively in a tough environment,” chief executive and chairman Alan Wilson said in a statement. “While conditions in Europe continue to challenge our consumer business in that region, we are growing sales in our other regions with product innovation, new distribution and brand marketing support. “
McCormick confirmed its previous earnings outlook for 2011 of $2.80 to $2.85. Fiscal revenue is expected to grow 5 to 7 percent. The company, whose brands include Grill Mates, Gourmet Collection and Lawry’s, anticipates at least $40 million in cost savings for the year.
View full post on Economy, Business And Finance Stories
