(RTTNews) - Tuesday, Corn Products International, Inc. (CPO: News ) said its third-quarter profit was down 40%, negatively impacted by higher net corn costs, unfavorable foreign currency translations and softer volumes. Earnings, however, came in ahead of analysts' estimates. Looking ahead, Corn Products tightened its fiscal 2009 earnings guidance based on the quarter results.

A provider of agriculturally derived ingredients for diversified markets, Corn Products said net income attributable to CPI plunged to $52.8 million or $0.70 per share for the third quarter from $88.1 million or $1.15 per share last year.

On average, six analysts polled by Thomson Reuters expected Corn Products to reports earnings per share of $0.63 for the third quarter.

Third-quarter results were negatively impacted by higher net corn costs, unfavorable foreign currency translations and softer volumes.

Net sales declined 10% to $970.6 million from $1.08 billion in the prior-year period, primarily due to negative $50 million foreign currency translations, a negative $38 million from price/mix attributable to co-products, and a negative $26 million from lower volumes.

Three analysts had estimated consensus revenue of $983.27 million for the quarter.

Commenting on the results Chief Executive Ilene Gordon said, "This quarter's diluted earnings per common share of $0.70 was our fourth-best quarter ever, trailing only the first three quarters of last year."
Geographically, South American net sales declined 11% to $271 million from $305 million a year ago, primarily due to the impact of unfavorable foreign currency translations of $33 million, and unfavorable price/mix of $14 million, $5 million of which was due to lower co-product prices. These factors were partially offset by improved volumes of $13 million.

North American net sales were down 9% to $599 million from $660 million in 2008, due to lower volumes of $38 million, negative price/mix of $18 million, and weaker foreign currencies of $5 million.

Asian/African net sales fell 15% to $101 million from $119 million last year, primarily due to the unfavorable impact of foreign currency translations of $12 million and lower price/mix of $6 million.

Gross margin for the quarter decreased to 15.8% from 18.8% recorded last year. The decline was mainly attributed to the higher net corn costs and lower volumes in the North American business.

Operating expenses for the quarter were $66 million or 6.8% of net sales, compared to $67 million or 6.2% of net sales last year. Operating income for the third quarter plunged to $88 million from $148 million a year ago.

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