Ingredion Q4 Profit Down, Results Miss Estimates; Sees 2014 EPS In Line

(RTTNews) - Ingredion Inc. (INGR), a provider of ingredient solutions to diversified industries, reported that its fourth-quarter net income attributable to the company dropped to $103.5 million or $1.35 per share, from $111.6 million or $1.42 per share in the same quarter last year.

Adjusted earnings per share fell 8 percent to $1.35 from year-ago adjusted earnings per share of $1.47. Analysts polled by Thomson Reuters expected the company to report earnings of $1.37 per share for the quarter. Analysts' estimates typically exclude special items.

Operating income was $161 million. This was a 13 percent decrease compared to $185 million of reported operating income in the fourth quarter of 2012. The decline was primarily due to continued weakness in South America, particularly Argentina, and soft results in North America. Strength in Asia Pacific and favorable corporate expense helped offset the decline.

Net sales for the quarter declined to $1.499 billion from $1.644 billion in the prior year quarter. Five analysts had consensus revenue estimate of $1.60 billion for the quarter. Sales were down 9 percent as a result of currency devaluations, volume declines and negative price/mix which was a result of lower raw material costs.

"As we look ahead to 2014, we expect to return to earnings per share growth. In 2014, the primary drivers of the bottom line growth should be improved performance in all four regions. We will also benefit from the accretion derived from our significant share repurchase late in 2013," said Ilene Gordon, chairman, president and chief executive officer.

For fiscal 2014, the company expects earnings per share to be in a range of $5.35 to $5.75 compared to $5.05 in 2013. The guidance anticipates ongoing cost pressures and currency headwinds in Argentina; a challenging environment as sugar prices remain low; and, an effective tax rate of 27 - 28 percent. All four regions are expected to deliver increased operating income. However, as a result of lower input costs, sales are expected to drop significantly for the total Company.

Street currently is looking for fiscal year 2014 earnings of $5.66 per share on annual revenues of $6.10 billion.

Capital expenditures in 2014 are anticipated to be approximately $300 million - $350 million. These investments will support growth and cost reduction actions across the organization.