Spice maker McCormick reported a 13 percent rise in its first quarter earnings, boosted by cost savings and strong domestic and Asian sales, the company said on Tuesday.
For the three months ended February 28, the company earned $76.8m, or 57 cents a share, beating analysts’ forecasts of 54 cents a share. This compared to $67.9m, or 51 cents a share a year earlier. Meanwhile, sales were up 2 percent to $782.8m during the quarter, but were lower than analysts’ estimates of about $803m, which the company attributed to weak sales in Europe and higher prices.
Chairman, president and CEO Alan D. Wilson said: "We are operating effectively in a tough environment as demonstrated by our first quarter results.
“…While conditions in Europe continue to challenge our consumer business in that region, we are growing sales in our other regions with product innovation, new distribution and brand marketing support. Product innovation and new distribution are also driving sales for our industrial business.
“Across both businesses, we have a growing presence in emerging markets and had particularly strong results in Mexico and China this quarter. Through our joint ventures we are gaining further access to emerging markets and reported a significant increase in profit from these businesses early in 2011."
Sales from the company’s industrial spice business increased 6 percent compared to the first quarter of 2010, while industrial sales in the Americas rose 7 percent.
“Increased demand for spices and seasonings from food manufacturers included new product introductions,” the company said.
Sales in its consumer division rose 11 percent in the quarter, led by growth in China.
Wilson added that the company has put into place “pricing actions” on most of its products in response to increases in raw and packaging material costs, and has implemented an initiative designed to improve productivity and reduce costs throughout the business.