Ingredion earnings climb 29% in third quarter
by Eric Schroeder
WESTCHESTER, ILL. — Improvements in volume, coupled with operating efficiencies and price increases, helped drive a 29% increase in third-quarter earnings at Ingredion Inc. Net income at Ingredion in period ended Sept. 30 totaled $112.7 million, equal to $1.47 per share on the common stock, up from $87.7 million, or $1.15 per share, in the same period a year ago. The most recent quarterly results included 7c per share of restructuring and impairment charges.
Net sales during the third quarter of fiscal 2012 totaled $1,679 million, up 3% from $1,627.7 million.
“We delivered a strong third quarter in spite of ongoing macroeconomic volatility,” said Ilene Gordon, chairman, president and chief executive officer. “Our third quarter adjusted earnings per share were the highest quarterly adjusted e.p.s. in our company’s history. Underlying this performance were volume improvement, operating efficiencies and price increases to cover higher raw material costs and foreign exchange headwinds.”
The strong third-quarter results led Ingredion to raise its full-year guidance to between 17% and 19% in fiscal 2012.
“We continue to see the strength of our business model, even in challenging times,” Ms. Gordon said. “We have generated meaningful top- and bottom-line growth while prudently navigating a volatile environment. Our confidence in our 2012 outlook and the reliability of the business prompted us to raise our dividend by 30% during the third quarter.”
Operating income in the company’s North America segment increased 33% in the third quarter of fiscal 2012 to $102.5 million from $77.3 million in the same period a year ago. Net sales increased 10% to $977.1 million from $889 million.
In South America, operating income was $46.7 million, down 2% from $47.6 million. Net sales also were lower, falling 12% to $362.5 million from $411.5 million.
Operating income in Asia Pacific climbed 43% to $28.6 million from $20 million on an 11% gain in sales to $215.4 million from $194.8 million.
In Europe, Middle East, Africa, operating income was $19.5 million, down 9% from $21.5 million a year ago. Net sales totaled $124 million, down 6% from $132.4 million in the same period of fiscal 2011.
For the nine months ended Sept. 30, overall net income was $316 million, or $4.13 per share, down 1% from $320.7 million, or $4.19 per share, in the same period a year ago. The first nine months of fiscal 2012 included a 16c per share benefit from the release of the Korean deferred tax valuation allowance that was offset by 18c per share in restructuring and impairment charges and 3c per share of business integration costs. Net sales in the nine months were $4,888.2 million, up 5% from $4,671.8 million.
Ingredion said its capital expenditures in 2012 are expected to total about $300 million and should support growth investments across the organization, particularly in North America, South America and Europe, Middle East, Africa.