Mead Johnson Nutrition Company (NYSE: MJN) announced today its financial results for the second quarter ended June 30, 2012.
- Net sales of $1,012.3 million in the quarter were up 9 percent versus the second quarter of 2011. Excluding the unfavorable impact of foreign exchange, sales increased 11 percent.
- GAAP net earnings of $0.81 per diluted share for the second quarter of 2012 were up 27 percent from $0.64 per diluted share a year ago.
- Non-GAAP (1) net earnings of $0.83 per diluted share increased 15 percent from $0.72 per diluted share for 2011.
- The sales increase was driven by the Asia/Latin America segment with constant dollar growth of 16 percent with a majority of the markets achieving double-digit gains. For the North America/Europe segment, sales were flat excluding the unfavorable impact of foreign exchange.
- Earnings benefited from strong sales growth, reduced IT and other separation expenses following the prior year SAP implementation, balance sheet re-measurement gains from foreign exchange and a lower effective tax rate. These benefits were partially offset by lower gross margins largely driven by higher commodity costs, higher demand-generation investments and the recognition of pension settlement expense.
- Full-year non-GAAP EPS is expected to be in the range of $3.04 to $3.14. Including specified items estimated at $0.09 per share, full-year GAAP EPS guidance is $2.95 to $3.05. (1) See “Non-GAAP Financial Measures” and the reconciliation of GAAP and non-GAAP results included in this release.
“Our sales and earnings growth continued to be strong in the second quarter,” said Chief Executive Officer Stephen W. Golsby. “Sales growth was broad-based across Asia and Latin America and included the first full-quarter from our Argentine acquisition. The majority of markets in this segment reported double-digit growth on a constant dollar basis. China/Hong Kong continued to deliver strong sales growth; however, we expect lower growth in the second half of the year in light of recent data indicating both a slowdown in the China category and a decline in Mead Johnson’s market share. In the North America/Europe segment, we saw a significant improvement in the U.S. business compared to the first quarter. We are particularly encouraged by strengthening market share amongst three-month old babies who will age into a higher consumption period during the second half. We increased global demand-generation investments to drive sustainable growth while benefiting from lower general and administrative spending, including significantly lower IT and other separation expenses. While mindful of the challenging economic environment and slower growth in China, we remain on track to deliver strong earnings growth in 2012.”