Corn Products International Inc. Earnings: Increasing Costs Tighten Margins as Net Income Falls

Corn Products International Inc. (NYSE:CPO) reported its results for the first quarter. Corn Products International, together with its subsidiaries, manufactures and sells a number of ingredients to a variety of food and industrial customers.

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Corn Products International Earnings Cheat Sheet for the First Quarter

Results: Net income for Corn Products International Inc. fell to $94.2 million ($1.21 per share) vs. $153.6 million ($1.97 per share) a year earlier. This is a decline of 38.7% from the year-earlier quarter.

Revenue: Rose 7.9% to $1.57 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Corn Products International Inc. fell in line with the mean analyst estimate of $1.21 per share. Analysts were expecting revenue of $1.59 billion.

Quoting Management: “We are quite pleased with the first quarter, which was the second highest quarterly adjusted EPS in the Company’s history. As expected, we saw a slight decline in adjusted earnings per share in the first quarter as we lapped a very strong year-ago period which was driven by favorable input costs,” said Ilene Gordon, chairman, president and chief executive officer.

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 84% from the year earlier, while the figure increased more than twofold in the third quarter of the last fiscal year, more than twofold in the second quarter of the last fiscal year and more than threefold in the first quarter of the last fiscal year.

Gross margin shrank 1.6 percentage points to 18.8%. The contraction appeared to be driven by increased costs, which rose 10.1% from the year earlier quarter while revenue rose 7.9%.

Revenue has increased for four consecutive quarters. Revenue increased 9.9% to $1.55 billion in the fourth quarter of the last fiscal year. The figure rose 59.7% in the third quarter of the last fiscal year from the year earlier and climbed 58% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now fallen in line with estimates for the past two quarters. It reported net income of $1.11 in the fourth quarter of the last fiscal year.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the second quarter is $1.26 per share, up from $1.25 ninety days ago. For the fiscal year, the average estimate has moved up from $5.11 a share to $5.17 over the last ninety days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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