Mead Johnson Nutrition Company Earnings Cheat Sheet: Revenue Grows By Double-Digits For Fifth Straight Quarter

S&P 500 (NYSE:SPY) component Mead Johnson Nutrition Company (NYSE:MJN) reported its results for the third quarter. Mead Johnson Nutrition provides pediatric nutrition and related products which help improve the health and development of infants and children around the world.

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Mead Johnson Nutrition Company Earnings Cheat Sheet for the Third Quarter

Results: Net income for the processed and packaged goods company rose to $144.7 million (70 cents per share) vs. $106.1 million (52 cents per share) in the same quarter a year earlier. This marks a rise of 36.4% from the year earlier quarter.

Revenue: Rose 15.3% to $933.9 million from the year earlier quarter.

Actual vs. Wall St. Expectations: MJN reported adjusted net income of 78 cents per share. By that measure, the company beat the mean estimate of 77 cents per share. Analysts were expecting revenue of $934.1 million.

Quoting Management: “We continue to see the success of our global growth strategies as evidenced by our strong sales and earnings performance in the quarter,” said Chief Executive Officer Stephen W. Golsby. “We experienced double-digit sales growth in the majority of our Asia and Latin America markets. Results for the U.S. business reflect share gains from our product innovation, offset by an overall decline in the market and a tough comparison with the third quarter of 2010 when a competitor commenced a product recall. We continue to invest in demand-generation activities for long-term growth. Strong sales, favorable foreign exchange impacts and a lower effective tax rate contributed to excellent earnings performance in the quarter.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 16.7%, with the biggest boost coming in the second quarter when revenue rose 22% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 8.8% and in the first quarter, the figure rose 16.3%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the second quarter, by 5 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.

Gross margin shrank 1.8 percentage points to 61.6%. The contraction appeared to be driven by increased costs, which rose 20.9% from the year earlier quarter while revenue rose 15.3%.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 54 cents per share, a drop from 62 cents. Over the past three months, the average estimate for the fiscal year has climbed from $2.72 per to share to $2.79.

Competitors to Watch: Synutra Intl., Inc. (NASDAQ:SYUT), Feihe International Inc (NYSE:ADY), Wimm-Bill-Dann Foods OJSC (NYSE:WBD), Dean Foods Company (NYSE:DF) and Lifeway Foods, Inc. (NASDAQ:LWAY).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)