UPDATE 2-Mead Johnson keeps outlook despite lower China prices
July 25 (Reuters) - Mead Johnson Nutrition Co reported slightly higher-than-expected second-quarter earnings on Thursday and stood by its full-year forecast, despite having to lower prices in China.
The maker of the Enfamil brand of baby formula saw its shares jump 7.5 percent in premarket trade.
Net income was $162.2 million, or 80 cents per share, down from $165.8 million, or 81 cents per share, a year earlier.
Excluding legal settlements, related costs and other special items, earnings were 84 cents per share. On that basis, analysts on average were expecting 83 cents, according to Thomson Reuters I/B/E/S.
Net sales rose 4 percent to $1.06 billion, topping Wall Street expectations of $1.04 billion.
The company affirmed its full-year forecast, which calls for earnings per share of $3.22 to $3.30 and sales growth of about 8 percent.
Mead Johnson said growth across its business should offset any hit from the recent lowering of prices in China due to an investigation by the government into possible price-fixing and anti-competitive behavior.
Mead Johnson and rival infant formula makers including Abbott Laboratories, Danone SA and Nestle SA , have cut prices of their products in recent weeks.
Analysts see the probe as possibly part of a broader Chinese plan to boost consumption of local infant milk products. Mothers turned away from Chinese milk powder in 2008 when infant formula tainted with the industrial compound melamine killed at least six babies and made thousands sick with kidney stones.
Mead Johnson shares rose to $76 in premarket trade. They closed at $70.67 on Wednesday on the New York Stock Exchange.