N. America results drive Corn Products earnings

by Eric Schroeder
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WESTCHESTER, ILL. — Volume growth and cost reduction programs in North America helped spur a sharp earnings gain at Corn Products International, Inc. in the first quarter ended March 31. Net income in the quarter was $43.4 million, equal to 58c per share on the common stock, up from $16.8 million, or 22c per share, in the previous year’s first quarter.

Net sales rose 13% to $937.2 million from $831.1 million in the previous year’s first quarter.

“We are very pleased with the business recovery,” said Ilene Gordon, chairman, president and chief executive officer. “We experienced double-digit volume increases, improved gross profit margins and favorable currencies compared with the first quarter of last year. The improvements are reflected in the 84% increase in operating income. All three regions performed better than last year.

“We are seeing a strong economic recovery in many of our international markets. In North America, we saw volume improvement across virtually all product categories, led by strong demand from the beverage industry in Mexico. In South America, volume growth was led by our customers in the brewing, confectionery, processed foods, and packaging industries. Volume improvement in Asia/Africa was led by customer demand for sweeteners in South Korea and the start of the economic recovery in Southeast Asia.”

Operating income in North America rose 89% to $38.4 million on a 2% gain in sales to $540.6 million. Corn Products attributed the gain in income to volume growth, improved plant utilization rates, and cost reduction programs.

In South America, operating income climbed 30% to $36 million, up from $27.7 million in the same period a year ago. Net sales also rose 30%, advancing to $277.7 million from $214.4 million.

Operating income in Asia/Africa soared 628% to $13.1 million from $1.8 million. Net sales in the region rose 39% to $118.9 million from $85.4 million.

Ms. Gordon said Corn Products is maintaining its full-year earnings guidance between a range of $2.25 to $2.60 per share.

“While we are starting to see some signs of economic recovery in the U.S., we expect North America growth to be driven by sweetener sales in our Mexican business,” Ms. Gordon said. “We expect continued growth in South America, led by a strengthening economy in Brazil. And we expect Asia/Africa’s growth to be driven by South Korea. We remain focused on operational excellence and executing on our strategy.”

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