Ingredion 2Q15 was “solid”

Ingredion has reported “solid” second quarter 2015 results. Second quarter 2015 reported and adjusted EPS were $1.47 and $1.53, respectively, up from $1.35 reported in the second quarter 2014. Year-to-date 2015 reported and adjusted EPS were $2.62 and $2.83, respectively, up from $2.31 reported in the year-ago period. “We are pleased with the second quarter results […]

Ingredion has reported “solid” second quarter 2015 results. Second quarter 2015 reported and adjusted EPS were $1.47 and $1.53, respectively, up from $1.35 reported in the second quarter 2014. Year-to-date 2015 reported and adjusted EPS were $2.62 and $2.83, respectively, up from $2.31 reported in the year-ago period.

“We are pleased with the second quarter results which were highlighted by higher specialty volumes, good operating efficiency, and strong earnings per share growth,” said Ilene Gordon, chairman, president and chief executive officer. “Although we experienced foreign-exchange headwinds across all four regions, our business model continues to work. In fact, operating income improved in North America, South America, and Asia Pacific.”

“We remain confident in our 2015 outlook. Strong specialty volumes, improved product mix, disciplined cost management, and the impacts of the first quarter acquisition of Penford Corporation are expected to drive bottom-line growth.”

“As we continue to execute our strategic blueprint, we are well positioned for further growth, especially in our higher-value ingredients that address key consumer trends. Our pending acquisition of Kerr Concentrates, Inc., a producer of natural fruit and vegetable concentrates, purees and essences, is another step to broaden our portfolio of wholesome, clean-label ingredient solutions, which consumers are increasingly demanding. The Penford integration remains on track for at least $20 million in annualized cost synergies and the underlying business is performing well. Our expectation for adjusted EPS for the year, including accretion resulting from both transactions, is narrowed to $5.60-$5.90, excluding the associated acquisition-related costs.”

Net sales for both the second quarter and first half were 2% down on the year-ago period, with the decline attributable almost entirely to adverse exchange rates.

Second quarter reported and adjusted operating income were $173 million and $180 million, respectively.  These were 6% and 11% increases, respectively, compared to $163 million of reported operating income in the second quarter of 2014.  The increases in operating income were primarily due to: Penford-related and strong specialty volumes; margin expansion in North America; and pricing actions in South America. These positives were partially offset by the negative effect of foreign exchange.

Year-to-date 2015 reported and adjusted operating income were $312 million and $336 million, respectively. These were 10% and 18% increases, respectively, compared to $285 million of year-to-date 2014 reported operating income.  The increases in operating income were primarily due to Penford-related and strong specialty volumes and margin expansion in North America.

Second quarter operating income was $23 million, down from $25 million a year ago.  Year-to-date operating income was $45 million, down $1 million from a year ago. In both periods, higher volumes and good cost management were offset by foreign-exchange impacts.