This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Mead Johnson Nutrition Reports Third Quarter Earnings; Year To Date Constant Dollar Sales Up 7 Percent

Stocks in this article: MJN

Third Quarter Results

Net sales for the quarter ended September 30, 2012 totaled $921.3 million, down one percent from $933.9 million a year ago. Sales growth increased six percent from price, offset by a decline of five percent in volume and a two percent reduction from foreign exchange. Earnings before interest and income taxes (EBIT) for the third quarter totaled $183.2 million, down from $201.7 million a year earlier. This decrease was primarily from foreign exchange balance sheet re-measurement losses in 2012 as compared to re-measurement gains in the prior year. In addition, lower costs associated with the establishment of our standalone IT infrastructure were largely offset by higher demand-generation investments.

Gross margin was 61.2 percent, down from 61.6 percent in the third quarter of 2011. The 40 basis point decline was attributed to higher commodity costs and unfavorable manufacturing variances from lower production volume in our North America/Europe segment, partially offset by higher prices and productivity gains.

Operating expense increased from higher advertising and promotion investments to support new product launches. In addition, foreign currency balance sheet re-measurement impacts, reported in Other Expense/Income, were unfavorable with current quarter losses compared against significant gains reported in the prior year. General and Administrative expenses were lower due to the implementation of SAP across our global system, which was completed in 2011, and lower performance-based compensation expense.

The effective tax rate for the quarter was 16.3 percent compared to 22.6 percent a year ago. The lower effective tax rate was primarily attributable to changes in management’s assertion that certain current and prior years’ foreign earnings and profits are permanently invested abroad, favorable return-to-provision adjustments associated with the recent filing of our 2011 U.S. income tax return and changes in the geographic earnings mix.

Net earnings attributable to shareholders totaled $140.3 million, or $0.69 per diluted share, compared with $144.7 million, or $0.70 per diluted share, for the third quarter a year ago.

2 of 7

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs