Shares in McCormick & Co. fell today (26 January) after the US-based spice maker issued a forecast for 2012 profits that was lower than Wall Street expected.
McCormick, which sells consumer brands including Schwarz and supplies spices and seasonings to food manufacturers, said it sees earnings per share reaching US$3.01-3.06 this year. According to Reuters, analysts had forecast $3.10 a share.
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The company also said its earnings per share in the first quarter of its new financial year would be lower than year-on-year. Last year’s spike in raw material costs began in the second quarter of McCormick’s last fiscal year, meaning that the company’s commodity costs in the first quarter will be higher than in the same period last year, it said.
McCormick chairman, president and CEO Alan Wilson said the company was on track to generate “solid profit growth” in the year ahead.
Nevertheless, the company’s shares were down 2.04% at $50.80 on the New York Stock Exchange at 14:13 ET today.
McCormick made the forecast after issuing its financial results for the year to 30 November. Its profits increased after sales and cost cuts offset higher raw material costs and charges from acquisitions. Operating income was up 6% at $540m. Profits from McCormick’s consumer and industrial divisions rose. Net income increased 1.1% to $374.2m.
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By GlobalDataSales climbed 11% to $3.77bn on the back of price increases and improvements in volumes and product mix. Acquisitions and new products helped McCormick’s top line, it said.
During the year, McCormick acquired Polish firm Kamis and took an 85% stake in a venture in India with local company Kohinoor Foods.
For the fourth quarter, McCormick reported a 1.4% fall in net income to $131.7m due to higher tax and interest charges. Operating income rose 7% to $192m. Sales increased 13% to $1.11bn.
Click here for the full earnings statement.
