Corn Products International, Inc. (CPO) reported Tuesday a 21% increase in fourth-quarter earnings, helped by favorable volumes, margins and foreign currencies compared to last year. Separately, the company provided an earnings forecast for fiscal 2010.
Net income attributable to the company for the quarter rose 21% to $56.3 million from $46.4 million in the corresponding period last year. Earnings were $0.74 per share compared with $0.61 per share in the year-ago quarter.
Financial results for the prior-year period included a negative $0.09 per share impact from the reimbursement of expenses in connection with the terminated merger with Bunge Limited.
On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share for the fourth quarter. Analysts' estimates typically exclude special items.
The company attributed the $0.13 improvement in earnings per share to solid performance from operations, which contributed changes of about $0.39. This was offset by non-operational changes of a negative $0.26, attributable to a higher effective tax rate, the company said.
Quarterly net sales increased 7% to $958.6 million from $900 million in the same period last year, and came in above $870.38 million projected by four Street analysts. Primary contributors were a positive $60 million from stronger foreign currencies; a positive $48 million from improved volumes; and a negative $49 million from lower price/mix, approximately half of which was related to lower co-product selling prices, the company said.
Operating income surged 55% to $99 million from $63.7 million in the year-ago quarter. Gross profit grew by 15% to $163 million from $141 million in the year-ago quarter. Gross margin was 17% compared with 15.7% last year helped by higher volumes and stronger foreign currencies, despite higher net corn and energy costs per ton.
Ilene Gordon, Chairman, President and Chief Executive Officer, said, "On a total company basis, volumes, margins, and foreign currencies were favorable versus last year and are reflected in the 55 percent improvement in operating income and the 21 percent improvement in EPS. All three regions performed better than last year on an operating income basis."
North America region net sales declined to $554 million from $563 million in the same period last year. Operating income was $62 million, up from $48 million last year, primarily due to lower manufacturing costs.
South America region net sales increased to $298 million from $246 million in the year-ago quarter. Operating income increased 22% to $46 million from $38 million in the prior year.
Asia/Africa region net sales grew to $106 million from $91 million last year. Operating income of $6 million was up from $3 million last year.
For the twelve-month period, net income plunged to $41.1 million from $267.2 million a year earlier. Earnings per share was $0.54, down from $3.52 per share reported for 2008. Financial results for 2009 include impairment charge of $110.3 million or $1.47 per share.
Net sales declined to $3.67 billion from $3.94 billion in 2008. Street analysts expected the company to report earnings of $1.90 per share on sales of $3.62 billion for 2009.
Looking ahead, Corn Products said that it expects 2010 earnings per share to be in the range of $2.25 to $2.60. Currently, analysts expect the company to report earnings of $2.38 per share for 2010.
"While the North American business environment remains challenging, we expect modest volume growth in North America driven by sweetener sales in our Mexican business," said Ilene Gordon.
"North America contracting was largely completed by 2009 year-end. Soft demand and lower corn costs resulted in lower pricing and a low single digit reduction in spreads; however, we expect North America gross profit and operating income to improve on higher volumes and manufacturing efficiencies."
He also added that the company expects better volumes in South America and Asia/Africa as regional economies improve, led by a strengthening economy in Brazil and continued HFCS volume recovery in Korea. The company also expects improved profitability in Asia on lower net corn costs and higher plant utilization rates.
The company expects to invest between $175 million and $200 million in capital projects during 2010.
CPO closed Monday's regular trading at $29.27.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.