Corn Products profits up 9% in North America

by Eric Schroeder
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WESTCHESTER, ILL. — Operating income in the North America division of Corn Products International, Inc. was $66.1 million in the third quarter ended Sept. 30, up 9% from the third quarter in 2009. Sales were $577.8 million, down 3%.

Explaining the 3% decline in sales, Corn Products said higher volumes and a positive impact from a strong Canadian dollar were offset by lower price/mix.

“The decline in price/mix reflected the normal correlation between finished product pricing and an 18% decline in corn costs versus last year,” the company said.

Operating margin in North America rose to 11.5% in the third quarter from 10.2% a year earlier.
In the nine months ended Sept. 30, operating income for North America was $164.6 million, up 43% from $114.8 million in the same period last year. Sales were $1,701.2 million, down 1%.

Overall, Corn Products net income in the third quarter was $38.8 million, equal to 49c per share on the common stock, down 28% from $54 million, or 70c per share, in the third quarter of 2009. Sales were $1,083.4 million, up 5%.

The company said earnings were up 16%, adjusted from its acquisition of National Starch and restructuring costs associated with the closing of a plant in Chile.

“I am pleased to report a very good quarter,” said Ilene Gordon, chairman, president and chief executive officer. “We saw strong volume growth across all our regions. In North America, we continued to see strong demand from the beverage industry in Mexico, as well as regional volume improvements in processed foods, corrugating and bakery. In South America, volume growth resulted from broad customer demand across multiple segments. In Asia/Africa, volume growth continued to be led by customer demand for sweeteners and starches in South Korea and Pakistan.”

During the third quarter, the overall gross margin for Corn Products widened to 16.8% from 15.8% in the third quarter last year. The company attributed the improvement to higher utilization rates, lower unit corn costs, cost reduction programs and stronger foreign currencies.

In the nine months ended Sept. 30, Corn Products net income was $122.6 million, or $1.55 per share, versus a year-to-date loss of $10.7 million in the same 2009 period. Sales were $3,144 million, up 9%.

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