McCormick income spikes 21 percent in third quarter

Local,Andrew Cannarsa
Spice and seasoning maker McCormick & Co. saw its profit jump 20.8 percent in the third quarter, because of strong sales from recent acquisitions and price increases.

The Sparks-based firm on Thursday reported net income in the quarter rose to $68.6 million, or 52 cents per share, from $56.8 million, or 43 cents per share, from the same period last year.

McCormick exceeded expectations, as analysts polled by Thomson Reuters expected profit of 48 cents per share for the quarter.

“Despite a tough economy and volatile material costs, we continue to grow sales and achieve higher profit,” said McCormick President and CEO Alan Wilson.

Overall, McCormick’s net sales increased 9.1 percent to $781.6 million in the quarter.

The company’s consumer sales increased 14.4 percent to $443 million on the strength of product mix and increased volume. McCormick in the last year acquired the Lawry’s business for $604 million and Billy Bee honey for $75 million.

Industrial sales to restaurants and catering companies increased 3 percent to $338.6 million. McCormick also continues to thrive internationally, as the company’s Asia/Pacific region reported a 25 percent increase in consumer sales and a 26 percent increase in industrial sales.

For the first nine months of 2008, McCormick’s consumer sales are up 12 percent from last year, while industrial sales are up 8.4 percent.

Total sales are up 10.4 percent through the first nine months of the year. McCormick had expected 2008 sales to increase 4 percent to 6 percent.

“Acquisitions, marketing support and other investments in our business have us well-positioned for the upcoming holiday season and on track for strong results in 2008,” Wilson said.

McCormick is starting to see the benefits of recent acquisitions, said Ann Gilpin, a analyst who follows the company for Morningstar.

“McCormick controls at least half of the market for spices and seasonings in North America and is more than twice the size of its next-largest branded competitor,” Gilpin said.  “With leading brands such as McCormick, Lawry’s and Old Bay, the company has sustained solid sales growth and profitability in its category.”

McCormick’s stock price increased 20 cents, or 0.5 percent, to close Thursday at $38.70 per share. The stock has increased 2.5 percent since the beginning of the year.
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