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McCormick & Company Q3 Profit Tops Estimates; Raises Earnings Guidance

McCormick & Company, Incorporated (MKC) reported a 14 percent year-on-year growth in its third-quarter adjusted earnings per share driven primarily by higher adjusted operating income, lower interest expense and a lower adjusted income tax rate. McCormick reported a 1 percent sales increase, including a 1 percent unfavorable impact from currency. In constant currency, sales were up 2 percent, for the quarter. For fiscal 2019, McCormick narrowed its projected growth ranges for sales, operating income and earnings per share, and increased its earnings per share outlook.

For the third-quarter, adjusted earnings per share was $1.46 compared to $1.28, last year. On average, ten analysts polled by Thomson Reuters expected the company to report profit per share of $1.29, for the quarter. Analysts' estimates typically exclude special items. Adjusted operating income was $261 million, a 9 percent increase from prior year, and a 10 percent increase in constant currency.

Third-quarter net sales were $1.33 billion compared to $1.32 billion, previous year. Analysts expected revenue of $1.34 billion for the quarter.

Lawrence Kurzius, CEO, said: "Our third quarter growth in the consumer segment accelerated versus our first half and was driven by our Americas and Asia Pacific regions. After a strong first half, our flavor solutions segment's sales were flat in constant currency compared to last year. We have delivered strong year to date flavor solutions results and are confident in our growth projection for the fourth quarter."

McCormick & Company increased 2019 adjusted earnings per share to be in the range of $5.30 to $5.35, from its previously reported guidance of $5.20 to $5.30. Analysts polled by Thomson Reuters expect the company to report profit per share of $5.28. The increase in guidance reflects the reduction of the fiscal 2019 projected adjusted effective tax rate to approximately 20 percent. In 2019, the company expects to grow sales by 1 percent to 2 percent, which in constant currency is a 3 percent to 4 percent projected growth rate.

For fiscal 2019, the company projects another year of strong cash flow, with plans to return a significant portion to shareholders through dividends and to pay down debt.

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