Corn Products International (INGR), a manufacturer of nature-based sweeteners, starches and nutrition ingredients, has posted a 7.89 percent increase in profit for the quarter ended Jun. 30, 2014.
The company earned $102.60 million or $1.35 a share in the second-quarter compared with $95.10 million or $1.20 a share a year ago. Analysts on average had predicted net income of $1.40 a share.
Revenue during the second-quarter dropped 9.23 percent to $1482.70 million from $1633.40 million in the last year period.
Gross margin expanded by 306 basis points over the previous year period to 19.96 percent. The company's operating income rose to $162.60 million, compared with $140.10 million in the last year period. That has resulted in improvement of 239 basis points in operating margins to 10.97 percent.
'We are pleased to deliver a good second quarter that reflects the overall positive trajectory of our business,' said Ilene Gordon, chairman, president and chief executive officer. 'Volumes were up in all four regions. North America, Asia Pacific and EMEA delivered strong operating income results. In South America, operating income improved in Brazil and Colombia but was offset by anticipated year-over-year declines in Argentina.'
Commenting on the guidance, the company said, '2014 EPS is expected to be in a range of $5.40 to $5.70 compared to $5.05 in 2013. The guidance anticipates continued cost pressures in Argentina and softness in the Brazilian economy; ongoing strong performance in Mexico; and, an effective tax rate of 27 - 28 percent.'
Cash Flow
Corn Products International has generated cash of $229 million from operating activities during the first half, up 104.46 percent or $117 million when compared with the last year period. The company has generated 7.63 cents of operating cash flow in every sales dollar for the first half, up from 3.32 cents in the same period last year.
The company has spent $116 million cash to meet investing activities during the first half, as against cash outgo of $111 million in the last year period. It has made net capital expenditure of $116 million during the first half, which was lower by 12.12 percent or $16 million, from a year ago.
The company has spent $94 million cash to meet financing activities during the first half, as against cash outgo of $23 million in the last year period. It has made net repayment of $41 million debt during the first half. It has raised net of $9 million by selling common stocks.
The company's cash dividend payment increased 25 percent or $13 million to $65 million. Dividend payment accounted for 28.38 percent of operating cash flow for the first half, compared with 46.43 percent in the same period previous year.
As on Jun. 30, 2014, the company's cash balance stood at $592 million, up 4.04 percent or $23 million from Jun. 30, 2013.
Working Capital
Corn Products International has witnessed an increase in the working capital over the last one year. The company's working capital stood at $1,567 million as at Jun. 30, 2014, up $23 million or 1.49 percent from $1,544 million on Jun. 30, 2013. It registered an increase in current ratio to 3.12 as at Jun. 30, 2014 from 2.91 on Jun. 30, 2013.
Debt Position
Corn Products International has witnessed a decline in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $1,770 million, down 2.21 percent or $40 million, from Jun. 30, 2013.
The company's total debt was 32.59 percent of total assets as on Jun. 30, 2014, compared with 33.05 percent on Jun. 30, 2013. It has witnessed a decline in debt to equity ratio to 0.68 on Jun. 30, 2014 compared with 0.73 on Jun. 30, 2013.
Shares of the company went down by 64 cents or 0.84 percent to close at $75.49 on Wednesday.