Corn Products earnings, sales up in second quarter

by Eric Schroeder
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WESTCHESTER, ILL. — Corn Products International, Inc. recorded strong second-quarter results, as net income and sales in the period ended June 30 rose 115% and 58%, respectively.

Net income in the second quarter was $79.3 million, equal to $1.03 per share on the common stock. This compared with earnings of $36.8 million, or 49c per share, in the same period of fiscal 2010. The most recent quarterly results included a 7c per share of acquisition integration charges and 2c per share of restructuring charges. Last year’s results, meanwhile, included 23c per share of restructuring charges and 4c per share of acquisition costs.

Second-quarter net sales increased 58% to $1,584.6 million from $1,003 million. Corn Products attributed the gain to higher volume of $337 million driven by sales from the company’s acquisition of National Starch Food Innovation.

“Corn Products delivered a very good second quarter and first half of 2011,” said Ilene Gordon, chairman, president and chief executive officer. “As expected volumes were relatively stable as customers and consumers continue to deal with economic challenges in various markets. Our pricing remains strong as we manage through rising input costs. We also successfully completed a sizable maintenance project at our largest facility and continue the integration of National Starch. We remain on-plan and are managing our business through a volatile marketplace while maintaining a sharp focus on executing our strategy.”

Operating income in the company’s North America segment rose 18% to $70.2 million from $59.6 million in the second quarter of fiscal 2010. Driving the gain was incremental operating income from the National Starch business, partially offset by an estimated $13 million of costs associated with a maintenance project. Net sales increased 46% to $852.6 million from $582.7 million. The increase reflected stronger volumes of $162 million, a price/mix benefit of $100 million, and $8 million from favorable foreign exchange rates.

In South America in the second quarter, operating income was $47.6 million, up 22% from $39.1 million in the same period a year ago. Net sales also were higher, rising 36% to $390.3 million from $286.6 million.

Operating income in Asia Pacific soared 623% to $22.4 million from $3.1 million on a 133% gain in sales to $201.4 million from $86.5 million.

In Europe, Middle East, Africa, operating income was $21.7 million, up 121% from $9.8 million a year ago. Net sales totaled $140.3 million, up 197% from $47.2 million in the second quarter of fiscal 2010.

For the six months ended June 30 net income at Corn Products was $232.9 million, or $3.04 per share, up 190% from $80.3 million, or $1.06 per share, in the same period of fiscal 2010. Net sales were $3,044 million, up 57% from $1,940.3 million.

Corn Products said it expects earnings-per-share guidance for the full fiscal year to remain in the range of $4.85 to $5.15, which would be up approximately 120% to 134% compared with fiscal 2010. Net sales are expected to exceed $6 billion in fiscal 2011.

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