WASHINGTON (dpa-AFX) - McCormick & Company Inc. (MKC) projects 2017 earnings per share to be in the range of $4.02 to $4.10 compared to $3.69 of earnings per share in 2016. Excluding an estimated $0.03 impact of special charges in 2017, the company projects adjusted earnings per share of $4.05 to $4.13. This is an increase of 7% to 9% from adjusted earnings per share of $3.78 in 2016. This range of growth includes an estimated unfavorable impact of 2 percentage points from unfavorable currency rates. Analysts polled by Thomson Reuters expect the company to report earnings of $4.10 per share for fiscal year 2017. Analysts' estimates typically exclude special items.
For the first quarter of 2017, the company expects earnings per share to be comparable to earnings per share of $0.73 in the first quarter of 2016, mainly as the result a planned double-digit increase in brand marketing, a higher tax rate and the timing of pricing actions. Analysts expect earnings of $0.82 per share for the fist-quarter.
For fiscal year 2017, the company projects another year of strong cash flow, with plans to return a significant portion to McCormick's shareholders through dividends and share repurchases.
In 2017, the company expects to grow sales 3% to 5% compared to 2016. Excluding the estimated impact of unfavorable currency rates, the projected growth rate is 5% to 7%. The company expects to drive sales with brand marketing, new products, expanded distribution and the incremental sales impact of acquisitions completed in fiscal year 2016 and from Giotti, acquired in December 2016.
Operating income in 2017 is expected to grow 7% to 9% from $641 million of operating income in 2016. Special charges of approximately $4 million are currently projected for 2017 that relate to previously announced organization and streamlining actions. Excluding the impact of special charges in 2017 and 2016, the company expects to grow adjusted operating income 8% to 10% from adjusted operating income of $657 million in 2016. Excluding the estimated impact of unfavorable currency rates, the expected year to year increase in adjusted operating income is 9% to 11%.
McCormick expects continued growth globally in consumer demand for flavor. Through 2021, Euromonitor International projects a 5% compound annual growth rate in global retail sales of herbs and spices.
The company said it exceeded $100 million in cost savings in 2016 and are on track to reach four-year $400 million goal of cost savings by 2019.
In 2017, the company expects to exceed 4% to 6% long-term constant currency objective for sales growth. It is balancing itsresources and efforts to drive sales with work to lower costs, and plan to achieve approximately $100 million in 2017 cost savings led by its Comprehensive Continuous Improvement program. With higher sales and greater productivity, it expects to increase earnings per share in line with long-term constant currency objective of 9% to 11%. Along with higher profit, it is working toward another year of strong cash flow .
Copyright RTT News/dpa-AFX