USA: McCormick profits edge up despite weak industrial business
US spice maker McCormick & Company has reported higher sales and earnings for the third quarter, despite weak sales to industrial customers.
The company reported net income of US$48.0m, or 35 cents per share, for the third quarter to 31 August, compared to $46.2m, or 33 cents per share, for the year-ago period. Sales for the quarter were $623m, a 1.5% increase from the third quarter of 2004.
Sales from the Silvo business acquired in 2004 and favourable foreign exchange rates were offset in part by lower sales to industrial customers.
"During the third quarter, we achieved higher profits with increased sales and income from our consumer business, the benefit of our cost savings program and improved income from joint ventures. As expected, sales to industrial customers were weak this quarter. We were also affected by higher interest rates and an increase in our tax rate. Based on our outlook for the fourth quarter, we continue to expect 2005 fiscal year earnings per share of $1.58 to $1.62," said Robert Lawless, chairman, president and CEO.
"During 2005, the company has been challenged by a high cost inventory of vanilla beans, weakness in industrial sales, an accounting adjustment and the effects of hurricane Katrina. Together, these factors have interrupted a period of strong sales and profit growth that began in 1999. As announced early in September, a review of our industrial business is underway as well as certain actions to improve the efficiency of our entire supply chain. With these actions, we are confident that long term, our sales growth, margin improvement and strong cash flow will once again lead to excellent financial results and increased value for McCormick shareholders," Lawless added.
Companies: McCormick & Co.
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