McCormick revises guidance, raises dividend payout
November 26, 2008
by Eric Schroeder
SPARKS, MD. — McCormick & Co. said it will record a non-cash charge of $28 million to $32 million in the fourth quarter of fiscal 2008, reflecting lower value for its Silvo division. McCormick acquired Silvo, which sells spices, seasonings and specialty foods in The Netherlands, in 2004.
As a result of the charge, McCormick said it now expects a full-year profit of $1.86 to $1.92 per share, compared with $1.73 per share in 2007. Excluding charges and other one-time items in 2007 and 2008, the company expects earnings per share to grow 9% to 11% year over year, in line with its previous outlook.
In September, McCormick forecast 2008 earnings per share in a range of $2.04 to $2.08.
"Our team in Europe has worked hard to grow our Silvo brand, but our progress to date has been disappointing and we must reduce the value of this brand on our balance sheet," said Alan Wilson, president and chief executive officer. "Silvo continues to be the brand preferred by consumers in The Netherlands, and we, therefore, remain committed to expanding our distribution in this market."
In a separate announcement, McCormick raised its quarterly dividend by 2c, or 9.1%, to 24c. The dividend is payable Jan. 16 to shareholders of record as of Dec. 31.
Shares of McCormick closed at $30.30 on Nov. 25 after opening the day at $31.18.