US spices and flavourings firm McCormick & Co has said earnings for the company’s 2005 fiscal year will be lower than expected due to a sales and profit shortfall in the industrial business and initial estimates of the impact of hurricane Katrina.
“We continue to be pleased with the performance of our consumer business. However, our previous financial projections for the industrial business are now overly optimistic based on business conditions during this period. At this time our industrial business is experiencing continued volatility in demand with certain customers as well as pricing pressure due to competitive activity. In addition, while we have not fully assessed the effects of hurricane Katrina, we do expect an impact on fourth quarter sales in the affected region, particularly for Zatarain’s products,” said Robert Lawless, chairman, president and CEO.
The company now expects earnings per share in the range of $1.58-$1.62 compared to previous guidance of $1.66-$1.70. For the third quarter, earnings per share are expected to be $0.33-$0.35.
I am not satisfied with this year’s financial performance. In the past we have been able to overcome obstacles and drive growth with the strength of our new products and marketing programs as well as cost reductions and expense controls. Although we continue to experience success in these areas, our growth in 2005 has been limited by issues including vanilla, sales to industrial customers and hurricane Katrina,” said Lawless.