McCormick income falls 33% in quarter

by FoodBusinessNews.net Staff
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SPARKS, MD. — Improved international sales, the incremental impact of Simply Asia Foods and favorable currency rates were not enough to stave off a second-quarter profit decline at McCormick & Co.

Net income in the quarter ended May 31 was $41,425,000, equal to 32c on the common stock, down 33% from $61,644,000, or 47c per share, during the same quarter of the previous year.

Net sales for the quarter were $687,214,000, up 7% compared with $639,906,000 during the same quarter of 2006.

Despite the lower earnings, Robert J. Lawless, chairman and chief executive officer, said sales and earnings for the second quarter "exceeded" expectations when compared with year-ago results that were boosted from a one-time benefit.

Sales in Europe and Asia/Pacific were strong during the quarter as a result of marketing support for branded consumer products in addition to increased sales of industrial products to strategic customers.

Operating income for the consumer business segment was $48,930,000, a 22% increase compared with $40,110,000 during the same quarter of the previous year. Sales in the segment increased 6% to $372,511,000, which compared with $350,054,000 during the same quarter of 2006.

In the industrial business segment, operating income was $17,978,000, a 23% increase compared with $14,588,000 during the same quarter of the previous year. Sales in the segment were $314,703,000, up 6% from $289,852,000 during the same quarter of the previous year.

For the six months ended May 31, net income was $85,653,000, or 66c per share, a 13% increase compared with $76,033,000, or 57c per share, during the same quarter of the previous year. Net sales were $1,339,854,000, a 7% increase compared with $1,249,607,000 during the same quarter of 2006.

For the fiscal year 2007, Mr. Lawless said the company expects to grow earnings per share 9% to 11% on a comparable basis, which is an increase of the original projection of 8% to 10%.

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