WASHINGTON (dpa-AFX) - Spices and seasonings maker McCormick & Co. Inc. (MKC) Tuesday reported a higher first-quarter profit, as sales rose 6 percent with solid increases in both its consumer and industrial businesses. The acquisition of WAPC accounted for a significant portion of sales growth in Consumer business. Both earnings per share as well as revenues topped analysts' expectations.
Looking ahead to the second quarter, the company expects only a slight increase in earnings per share, and reaffirmed its financial outlook for fiscal year 2014.
For the first quarter ended February 28, 2014, the company's net income increased to $82.5 million or $0.62 per share from $76 million or $0.57 per share in the previous year.
On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.58 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 6 percent to $993.4 million from $934.4 million in the prior-year quarter, and came above analysts' estimate of $973.20 million.
In local currency, revenue increase was 8 percent. The acquisition of WAPC, completed in May 2013, contributed 4 percent to this growth rate. Pricing actions and higher volume and product mix, largely accounted for the other half of the sales increase.
Consumer business sales increased 8 percent, and Industrial business sales grew 4 percent from the preceding year.
Gross profit margin rose to 39.4 percent from 38.7 percent last year, helped by cost savings from the company's Comprehensive Continuous Improvement or CCI program, as well as a favorable mix of business.
Alan Wilson, chairman, president and CEO of the company said, 'Our first quarter result was a great start to 2014 with higher sales, a profit result that was ahead of our initial outlook, and strong cash flow.'
Looking ahead to the second quarter, the company expects earnings per share to increase only slightly from the year-ago period as a result of several factors, including higher brand marketing support and weakness in demand from quick service restaurants in the U.S.
The company reaffirmed its 2014 earnings per share guidance of $3.22 to $3.29, and its plans to grow sales 3 to 5 percent in local currency.
Street is currently looking for fiscal year 2014 earnings of $3.26 per share, on revenues of $4.29 billion.
McCormick shares closed Monday's regular trading at $67.51, down 0.04 percent.
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