Ingredion has reported results for the second quarter 2014. Although second quarter sales were down 9% to $1,483 million and first half sales were down 12% to $2,840 million – both as a result of unfavourable exchange rates and volume/mix, the company noted overall growth in volumes, profit and second quarterEPS, which was up 13%.
"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.”
Second quarter 2014 operating income increased 16% to $163 million compared to $140 million in the second quarter of 2013. Strength in EMEA and APAC and improved results in North America were slightly offset by a small decline in South America. Year-to-date 2014 operating income fell 10% from $315 million to $285 million largely as a result of on-going weakness in South America and a weaker-than-expected first quarter in North America.
In its guidance to analysts, Ingredion said that 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. In-line with previous guidance, operating income in Asia Pacific and EMEA is expected to be up, while North American operating income is expected to be flat to slightly up. South America is now expected to be slightly down. As a result of lower input costs, sales are expected to drop significantly for the total company.
