Corn Products International Reports Net Income Increase Of 246%

Corn Products International Inc. (CP), a leading global provider of sweeteners, starch products and animal feeds, reported on Monday a first quarter net income increase of 246% to $155.5 million from $44.9 million in 2010. Excluding a $58 million tax-free payment the company received from the government of Mexico to settle a trade dispute, the net income figure would have been $97.5 million. Adjusted EPS rose 103% from $0.63 to $1.28 in the quarter.
Corn Products is a major supplier of high-quality food ingredients and industrial products. The products are derived primarily from the processing of corn and other starch-based materials, such as tapioca, potato and rice. Sweetener products have historically accounted for over 50% of sales and include glucose corn syrups as well as dextrose and polyols which the company supplies to the food and beverage industries. Other products include industrial and foodgrade starches, animal feed and corn oil.
On Oct. 1, 2010, the Company acquired National Starch, a global provider of specialty starches from Akzo Nobel N.V., headquartered in the Netherlands. National Starch is an innovative manufacturer of food ingredients and specialty starches. Its products are supported by more than 800 patents and patents pending.
First quarter net sales rose 56% from $937 million to $1.46 billion. The increase is attributable to higher volume of $351 million which was largely a result of the incremental $348 million of sales associated with the National Starch business. Higher selling prices contributed a further $149 million.
North American net sales rose 44% from $541 million to $780 million (53% of total sales) in the first quarter 2011. The increase came primarily from stronger volumes of $166 million. South American sales in the first quarter 2011 were $368 million (25% of total sales), an increase of 32%, compared to $278 million in the prior-year quarter as sales increased throughout the region. Asia Pacific and Europe were both boosted by the acquisition of the National Starch business, and net sales rose 133% to $182 million (12% of total sales) and 219% to $130 million (10% of total sales) respectively.
Ilene Gordon, chairman, president and chief executive officer said, “Looking ahead, we continue to expect another year of earnings growth. We also plan to continue to invest in our business for future growth through capital expansions in key markets like Brazil, cost savings programs, and new product development leveraging our acquired R&D capability." The company forecasts EPS for 2011 to be in a range of $4.85 to $5.15 (2010: $2.20) based on sales in excess of $6 billion (2010: $4.6 billion). Shares closed on May 3 at $55.26, representing a forecast PE of approximately 11.
Disclosure: The author holds no long or short positions in Corn Products International.

(Source: http://www.gurufocus.com/news/130888/corn-products-international-reports-net-income-increase-of-246)