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» Corn Products International, Inc. Q4 2009 Earnings Call Transcript
As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements and Corn Products International is under no obligation to update them in the future and, or if circumstances change. Additional information concerning factors that could cause actual results to differ materially and those discussed during today’s conference call were in this morning’s press release and can be found in the company’s most recently-filed annual report on Form 10-K and subsequent reports on Form 10-Q and 8-K.With that out of the way, I’m happy to turn the call over to Ilene. Ilene Gordon Thanks, Aaron, and let me add my welcome to everyone joining us today. We appreciate your time and interest. The first quarter came in very much as we anticipated. You’ll recall that we indicated in February that we expected adjusted EPS to be down slightly in the first quarter. This was a result of both a very difficult comparison with the first quarter of 2011 and the timing of raw material costs in each year. As a reminder, 2011 was a front-end loaded year and the first quarter was the strongest period. 2012 is likely to be the opposite with results getting stronger as we move through the year. Given that view, we are all the more pleased with delivering what is the second highest quarterly adjusted EPS in our history. If the back half plays out as we anticipate, that implies a very strong year in line with our guidance. Beyond the overall good EPS performance, we also saw volumes increase for the company, driven by strong performance in North America. We experienced very good demand for the beverage and brewing industries. Sales were further driven by robust pricing across the organization. We continue to demonstrate the ability to appropriately pass through higher input costs.
Finally, as we previously announced, pending shareholder approval, we intent do change the name of our company to Ingredion. We fundamentally see this name as having a much better fit with our business model and our portfolio. While corn is our primary raw material, having that in our name does not reflect our business strategy, as we don’t raise or trade crops and we don’t speculatively hedge or run for-profit logistic operations, we are more properly defined as an ingredient company.Ingredion clearly conveys who we are. With approval of the name, we intend to make the change official on or about June 4 and will begin trading under the ticker INGR on the New York Stock Exchange. Let’s now take a quick look at our regional business performance in the quarter. Starting with North America, as I mentioned earlier, volume rose on strong soft drink and brewing sales. At the same time, we achieved incremental pricing to offset higher raw material costs. Operating income fell by just $1 million. Let me put that in context as we were lapping one of the strongest quarters we’ve had in North America. We were also [inaudible] at the timing and pricing of our hedges were more favorable a year ago. All told, this was a very good quarter in America and tipped the stage for another strong year. Turning to South America, we’ve taken significant pricing actions there to offset higher input costs and devaluing currency. However, the first quarter saw slower economic activity. The decline in operating income resulted from a combination of lower volumes and foreign exchange headwinds. We expect the price the price through the foreign exchange during the year to mitigate its impact. In fact, we expect year-over-year growth in operating income for this region. We continue to make significant capital investments and are setting ourselves up to benefit from growth in the region as well as from the upcoming World Cup and Olympic Games. The long-term prospects in the region remain compelling.
We continue to see mixed demand trends in Asia Pacific. Volume was stable and operating income increased. In our EMEA regions, sales fell slightly, which should be viewed as a positive considering the challenges we’re facing with the sluggish European economy and ongoing energy issues from our customers in Pakistan.Read the rest of this transcript for free on seekingalpha.com