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Gain Boosts McCormick Quarter

It sees full-year earnings growth at the high end of its previous range.

McCormick

(MKC) - Get McCormick & Company, Incorporated (MKC) Report

, the spicemaker, reported a rise in second-quarter earnings partially due to an acquisition-related gain.

In the quarter ended May 31, the company earned $40 million, or 28 cents a share, compared with $33.6 million, or 24 cents a share, in last year's quarter. Analysts were expecting 26 cents a share. Earnings per share benefited by 2 cents from operations and by 3 cents from interest income related to the April 28 purchase price settlement with European spice company Ducros, which McCormick acquired in 2000.

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Revenue was $596 million, up 8%, the company said, boosted 5% by favorable exchange rates. Consumer business sales rose 10%, but excluding foreign exchange, sales increased 3%. The company noted that its consumer business had an 8% increase in operating income despite a 13% increase in advertising.

The company also said it completed the acquisition of the Zatarain's brand on June 4. On Thursday, McCormick announced it will sell its packaging unit, which is expected to be completed in the third quarter.

Looking to full-year 2003, the company expects continuing operations, excluding the packaging business and including Zatarain's, to post an 8% to 10% sales increase and an 11% or 12% earnings increase. Analysts expect the company to earn $1.45 a share on revenue of $2.49 billion.

For 2004, sales are expected to be at the higher end of the company's long-term 3% to 7% growth range. Analysts expect revenue of $2.6 billion.

Shares of the Sparks, Md.-based company were climbing 1.1% in morning trading at $26.70.