May 2, 2012

Corn Products Q1 revenue down 39% as sales dropped

As Corn Products International Inc.'s (CPO) sales declined in three of its four regions, its first-quarter earnings fell 39%.

Corn Products has seen its profits soar over the past year as it has been able to offset rising corn costs with higher prices. The company has also benefited from a diversification strategy that included the 2010 acquisition of National Starch, a maker of ingredients for soups, mayonnaise, sauces and yogurt.

Corn Products intends to change its name to Ingredion later this year as it looks to shed its image as an agricultural company and better reflect its business as a supplier of sweeteners and starches to food processors and industrial customers.

Corn Products reported a profit of US$94.2 million, or US$1.21 a share, down from US$153.6 million, or US$1.97 a share, a year earlier. Excluding items such as integration costs, restructuring charges and a gain from a North American Free Trade Agreement settlement, adjusted earnings fell to US$1.26 a share from US$1.28. Net sales after shipping and handling costs jumped 7.9% to US$1.57 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of US$1.22 a share on revenue of US$1.59 billion. Gross margin fell to 18.8% from 20.4%.

Sales in North America, the largest top-line contributor, jumped 14% to US$891.8 million, while South American sales slipped 0.1% to US$367.5 million. Sales in the company's Asia Pacific segment grew 3.9%, while the Europe, Middle East, Africa segment saw sales fall 3.2%.

The company also backed its full-year earnings estimate. Shares closed Monday at US$57.06 and were inactive premarket. The stock has gained 3.6% over the past year.