Mead Johnson Profit Tops Estimates; Outlook Weak - Update

(RTTNews) - Mead Johnson Nutrition Co. (MJN) Friday reported a higher fourth-quarter profit, on demand for its products in Asia and Latin America, and with margins improving. While quarterly earnings topped Wall Street estimates, sales were in line with expectations.

Nevertheless, Mead Johnson detailed some weak adjusted earnings outlook for 2014 and said margins will be impacted by higher dairy costs and foreign exchange volatility.

Mead Johnson sells infant formulas, children's nutrition, and other nutritional products.

The Glenview, Illinois-based company reported fourth-quarter net earnings to shareholders of $153 million or $0.75 per share, compared to $134 million or $0.66 per share last year.

Excluding items, adjusted earnings for the quarter were $0.78 per share, compared to $0.72 per share a year ago. On average, 15 analysts polled by Thomson Reuters expected earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter climbed 8 percent to $1.06 billion from $981 million in the prior year. Eleven analysts had a consensus revenue expectation of $1.06 billion for the quarter.

Emerging markets has been a key driver of growth at the company. Sales in Asia grew 19 percent and Latin America was up 5 percent. But sales in North America and Europe were down.

Gross margin for the quarter was 63 percent, up 190 basis points from the prior year.

For fiscal 2014, the company expects net earnings of $3.44 to $3.56 per share and adjusted earnings of $3.50 to $3.62 per share. Analysts currently expect earnings of $3.67 per share for the year.

Mead Johnson stock is trading at $77.92, down $1.45 or 1.83%, on a volume of 1.4 million shares on the NYSE.