US: Mead Johnson profit gain trails sales growth
- Sales up 5%
- Earnings rise to $172.5m
- Confirms FY outlook
Mead Johnson sees sales, earnings growth
Mead Johnson has booked an increase in first-quarter sales and earnings, however, higher expenses meant profit growth trailed revenue gains.
In a regulatory filing yesterday (26 April), Mead Johnson said sales in the three months to 31 March rose 5% to US$1.03bn. Gains were driven by a 7% lift in the group's Asia/Latin America region. Excluding the impact of discontinued operations, sales were up 6% on the year.
Operating profit in the three months rose to $249.1m, up from $248.8m last year. Net profit grew to $172.5m from $164.2m in the first quarter of 2012. Profits were boosted by higher sales and a lower effective tax rate, however, this was partially offset by an increased investment in brand building and demand generation activities as well as a one-off pension settlement expense.
Looking to the full-year, management confirmed its expectation for sales, excluding FX, to grow by 6-7%. The group guided to earnings per share in the range of $3.22 to $3.30.
Mead Johnson Reports Solid First Quarter Earnings; Delivers Five Percent Constant Dollar Sales Growth; and Reaffirms Annual Guidance
GLENVIEW, Ill.--(BUSINESS WIRE)-- Mead Johnson Nutrition Company (MJN) today announced its financial results for the quarter ended March 31, 2013. First quarter sales of $1,037.9 million increased five percent, on both a reported and constant dollar basis, up from $986.6 million in the same quarter a year ago. This sales increase was driven by seven percent growth in the Asia/Latin America segment and one percent growth in the North America/Europe segment. Excluding the impact of several non-core businesses exited in late 2012, sales growth in the first quarter of 2013 was six percent compared to the same quarter a year ago. On the same basis, the North America/Europe segment, which included most of the non-core businesses, grew by five percent. GAAP net earnings of $0.85 per diluted share for the first quarter of 2013 were up from $0.80 per diluted share a year ago. Non-GAAP (1) net earnings of $0.85 per diluted share for the first quarter of 2013 increased from $0.82 per diluted share in 2012. Earnings benefited from higher sales and a lower effective tax rate, partially offset by higher demand-generation investments and pension settlement expense. Mead Johnson confirms its full-year GAAP EPS is expected to be in the range of $3.20 to $3.28. Excluding Specified Items,(1) estimated at $0.02 per diluted share, the full-year 2013 non-GAAP EPS is expected to be in the range of $3.22 to $3.30. (1) For the definition of Specified Items and a reconciliation of GAAP and non-GAAP results, see "Non-GAAP Financial Measures" on the scheduled titled "Supplemental Financial Information," included in this release. "We are pleased with our solid sales and earnings growth during the first quarter," said Chief Executive Officer Stephen W. Golsby. "Sales growth was strong and broad-based across South Asia and Latin America. As expected, sales in China were down compared to last year, given higher market share in the first quarter of 2012, although we continued to deliver gains on a sequential basis, with first quarter market share higher than in the fourth quarter of 2012. Hong Kong experienced particularly strong sales growth, which we believe reflected heavy demand in anticipation of the March 1st implementation of a new regulation limiting exports into China. We are maintaining a cautious outlook on the ongoing impact, since retail demand in Hong Kong fell in March as the new regulation took effect. In the North America/Europe segment, we continued to make progress building non-WIC* market share in the United States, which mitigated the impact of several non-core businesses exited in 2012 and lower category consumption. During the quarter, we made noticeably higher demand-generation investments to drive sustainable growth. While mindful of the added uncertainty created by the new Hong Kong regulation, we remain confident in the strong growth of our business and continue to expect core sales to grow in the range of seven to eight percent in 2013." *WIC = United States Department of Agriculture Special Supplemental Nutrition Program for Women, Infants, and Children First Quarter Results Sales for the first quarter of 2013 totaled $1,037.9 million, up five percent from $986.6 million a year ago. Sales benefited six percent from price, offset by a one percent decline in volume. Earnings before interest and income taxes ("EBIT") totaled $249.1 million, up from $248.8 million in the prior-year quarter. Higher demand-generation investments and pension settlement expense offset the benefit of higher sales.
Original source: Mead Johnson
US infant formula market Mead Johnson has booked an increase in third-quarter sales and upped its sales forecast for the full year....
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