Corn Products 4Q Drops 7.6% On Acquisition Costs; Revenue Up

Corn Products International Inc.'s (CPO) fourth-quarter profit slipped 7.6% on acquisition charges, while the company's adjusted earnings jumped sharply on higher volumes, lower input costs and triple-digit growth in the company's Asia-Africa segment.

The results easily surpassed analysts' expectations for the quarter.

Corn Products, which supplies sweeteners and starches to food processors and industrial customers, has pursued a diversification strategy that included last year's $1.3-billion takeover of National Starch, a maker of ingredients for soups, mayonaise, sauces and yogurt.

The company said in December it plans to spend $75 million to $100 million over the next few years to expand its Brazilian business, where demand from food, beverage and industrial customers is increasing. Beverage makers in Mexico have also driven up corn syrup demand even as some U.S. food manufacturers switch to sugar because of perceived health concerns.

Corn Products reported a profit of $52 million, or 67 cents a share, down from $56.3 million, or 74 cents a share, a year earlier. The latest quarter included 38 cents in charges stemming from acquisition costs and fair-value markups of acquired inventory. Revenue increased 47% to $1.41 billion.

Analysts polled by Thomson Reuters expected earnings of 73 cents on revenue of $1.1 billion.

Gross margin widened to 17.5% from 17%, mostly on improvement in North America, South America and Asia.

Sales in North America, the company's largest segment by revenue, rose 33%, while sales increased 23% in South America and jumped 119% in its Asia-Africa segment.

The grain processor also issued a full-year earnings forecast of $3.60 to $3.90 a share on revenue of $6 billion. Wall Street had projected a per-share profit of $3.73 on $5.73 billion in revenue.

Corn Products shares closed Wednesday at $48.60 and were inactive premarket. The stock has gained 48% over the past year.

(Source: http://online.wsj.com/article/BT-CO-20110217-705503.html)