McCormick's fiscal Q3 earnings fell to US$92M from US$102.4M a year ago as higher prices for ingredients such as pepper offset benefit of higher sales, price increases for spices and seasonings; revenue grew 16% to US$920.4M
September 28, 2011
– McCormick & Co. said Friday its fiscal third-quarter earnings fell as higher prices for ingredients like pepper offset the benefit of higher sales and price increases for its spices and seasonings.
The company said it earned $92 million, or 69 cents per share, in the quarter that ended Aug. 31, compared with $102.4 million, or 76 cents per share, on the same three-month period in 2010. The year-ago quarter included 10 cents per share from the reversal of a tax accrual.
Sales rose 16 percent to $920.4 million from $794.6 million a year earlier.
Analysts polled by FactSet Research expected a profit of 65 cents per share on revenue of $869.9 million.
McCormick said price increases, which it implemented in response to higher packaging and raw materials costs, added 5 percent to sales.
The cost of goods sold in the quarter rose 21 percent. McCormick said that included higher prices for pepper and cinnamon as well as other ingredients.
The company expects costs to continue to increase in the fiscal fourth quarter, but it's hoping to counteract them by raising prices and cutting costs.
McCormick maintained its fiscal year earnings forecast of $2.74 to $2.79, but said it expects higher costs related to a pair of acquisitions to drag down earnings by 7 cents per share. Analysts expect $2.79 per share for the fiscal year that ends in November.
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