WASHINGTON (dpa-AFX) - Spices and seasonings maker McCormick & Co. Inc. (MKC) Thursday reported higher second-quarter profit, as sales rose 3 percent, with increases in both its consumer and industrial businesses. Earnings per share topped analysts' expectations, while revenues came almost in line with view. The company also reaffirmed its financial outlook for 2014.
Alan Wilson, chairman, president and CEO of the company said, 'Demand for flavor is growing globally and McCormick is meeting this demand with its range of products that include innovative new items, healthy recipe ideas, ethnic cuisine and family favorites.'
The company noted that through its Comprehensive Continuous Improvement or CCI program, it is on-track to reach at least $45 million cost savings in 2014.
Cost savings from CCI program and the impact of higher-margin industrial products improved recent-quarter gross profit margin to 39.9 percent from 39.3 percent in the year-ago period.
For the second quarter ended May 31, 2014, the company's net income increased to $84.5 million or $0.64 per share from $78.6 million or $0.59 per share in the previous year.
On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly sales increased 3 percent to $1.03 billion from $1.0 billion a year ago, with increases in both its consumer and industrial businesses. Seven analysts had consensus revenue estimate of $1.04 billion for the quarter.
Consumer Business segment sales rose 4 percent from last year, with Wuhan Asia Pacific Condiments, or WAPC acquisition contributing 6 percentage points of sales growth. Industrial business sales improved 2 percent. In local currency, the increase was 3 percent.
According to the firm, the rate of growth in international markets was mainly strong this period, including incremental sales of WAPC that was acquired in May 2013 and added 3 percentage points to sales growth.
The company saw lower sales in the Americas region, mainly as a result of competitive pressure for its consumer business. However, it anticipates improved performance in U.S. consumer business toward the end of 2014.
For fiscal 2014, the company confirmed its plans to increase sales by 3 to 5 percent in local currency and report earnings per share of $3.22 to $3.29. Analysts project annual earnings of $3.27 per share.
MKC closed Wednesday's regular trading at $71.18, down 0.17 percent.
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