Wrigley Q1 earnings jump 18%

by Eric Schroeder
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CHICAGO — On the same day the company announced it plans to sell itself to candy maker Mars, Inc., Chicago-based Wm. Wrigley Jr. Co. posted record first-quarter net income of $168,599,000, equal to 62c per share on the common stock, up 18% from $142,701,000, or 52c per share, in the first quarter a year ago.

Net sales in the first quarter ended March 31 totaled $1,451,550,000, up 16% from $1,254,046,000 in the same period a year ago. Wrigley said about half of the increase was due to the positive impact of currency, while the balance of the gain was the result of a combination of price/mix and a one percentage point growth in shipments.

"The strong results this quarter are a reflection of our global base of operations, in particular, the vigor of our business operations in fast-growing marketplaces across the developing geographies of East Europe and Asia," said Bill Wrigley, executive chairman and chairman of the board. "The overall confectionery category remains strong despite the economic turbulence so far this year, and we continue to make significant investments in sales capabilities, innovation and brand building to take full advantage of long-term business opportunities."

Wrigley said performance in its North American operations improved year-over-year. The region’s operating income totaled $85,943,000 in the first quarter, up 13% from $76,114,000 in the same period a year ago. Net sales for the North American market were $433,191,000, which was up 5%. Wrigley said the gain in sales came despite a 10% drop in volume.

"Gum sales showed strength, led by the record-setting growth of the 5 brand, along with continuing sales gains for Orbit and Eclipse in the quarter," the company said. "Those gains were more than offset by declines for Altoids and Lifesavers, which faced difficult comparisons versus new product launches in the year-ago period."

For the EMEAI region (Europe, Middle East, Africa and India), sales increased 20% to $679,088,000 on volume growth of 20%. Operating income in the EMEAI region was $155,192,000, up 11%.

Sales in Asia/Pacific were up 25% to $317,447,000 with a volume growth of 4%. Operating income was $95,952,000, up 30%. Prior to this quarter, Asia was recorded as a separate unit and Pacific was part of the "all other" segment.

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