Corn Products net rises 29%

by Stephanie Bloyd
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WESTCHESTER, ILL. —Corn Products International, Inc., a global provider of agriculturally derived ingredients, posted net income of $64.3 million for the first quarter ended March 31, equal to 87c per share on the common stock, up 29% from net income of $50 million, or 67c per share, during the same period a year ago.

Net sales also increased to $930.9 million in the first quarter of 2008, up 22% from $761.9 million in the prior-year period. The net sales growth was predominantly the result of strong pricing actions, product mix improvement and favorable currency translation, the company said. Volumes fell slightly due to lower customer demand.

"We have raised our 2008 e.p.s. guidance on the strength of our first-quarter performance and the greater visibility we have on the rest of the year," said Sam Scott, chairman, president and chief executive officer. "We now expect a 12% to 22% increase in diluted e.p.s. in 2008, or $2.90 to $3.15, versus $2.59 in 2007, which included a 5c gain from our company's holdings in CME Group Inc. Our prior 2008 e.p.s. guidance was $2.65 to $2.85. We also now believe that net sales in 2008 should reach $4 billion."

North American net sales for the first quarter increased 15% to $536.9 million, which compared with sales of $467.8 million in 2007. The gain was attributed predominantly to improved price/product mix, along with positive foreign currency translation. Volumes were unfavorable across the region due primarily to poor weather conditions and the economic softness, both of which impacted customer takeaway. All three countries contributed to the net sales growth, the company said.

In South America, net sales rose 36% to $272.1 million, up from $200.4 million a year ago, the result of favorable price and product mix and foreign currency translation, slightly offset by lower volumes from reduced takeaway in the Brazilian brewing segment. Brazil and the Southern Cone delivered strong performances. The Andean region's performance was negatively impacted by expenses related to the start-up of an infant food program which is expected to become a more positive contributor later in 2008.

Net sales in Asia and Africa grew 30% to $121.9 million, versus $93.7 million last year due to strong pricing actions. Operating income improvements in Pakistan, Thailand, China and Kenya were more than offset by a decline in South Korea's operating income. Excluding South Korea, the division's operating income increased 40%.

"Our North and South American businesses should continue to drive our improved performance for the balance of 2008," Mr. Scott said. "We still expect lower results in Asia/Africa due to the cost and volume challenges in South Korea we have previously discussed."

He added that results in the first half of 2008 are expected to be stronger than those in the second half due to anticipated higher raw material costs.

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