McCormick Shares Jump After Earnings Top Expectations
Spice manufacturer McCormickposted better-than-expected quarterly profit on Wednesday as it completes a restructuring program, sending its shares up as much as 6 percent.
Net income for the fiscal second quarter ended May 31 was $41.4 million, or 31 cents per share, including charges of 4 cents a share related to the restructuring program.
Analysts, on average, had expected the Sparks, Maryland-based company to earn 29 cents per share after one-time charges, according to Reuters Estimates.
McCormick's restructuring has included closing plants and consolidating operations in an effort to improve results.
In the year-earlier second quarter, the company earned $61.6 million, or 46 cents per share, including a favorable impact of credits that increased profit by 14 cents a share.
"Our financial results have been ahead of our expectations," Chief Executive Officer Bob Lawless said on a conference call. "This will give us an opportunity to invest back in the business to drive future sales, as well as tremendous confidence that we'll be ahead of our initial goals for 2007."
Second-quarter net sales rose 7 percent to $687.2 million, helped by strong results in Europe and the Asia/Pacific region, the company said. U.S. sales were boosted by Simply Asia Foods, acquired in June 2006.
Analysts' average sales forecast was $676.9 million.
McCormick shares were up $1.92 to $37.42 in morning trade on the New York Stock Exchange after rising as high as $37.75 earlier in the session.
The company raised its full-year earnings forecast slightly, to a range of $1.69 to $1.73 a share, including an estimated 18 cents in restructuring charges. Its previous forecast was $1.67 to $1.71.
Analysts' average forecast is $1.73 including charges, according to Reuters Estimates.
Under its U.S. "spice revitalization plan," the company has introduced trendy gourmet seasonings such as smoked paprika and black sesame seed, and packaging with flip-top caps.