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Corn Products International Reports 65 Percent Increase in 2007 Second Quarter Diluted EPS to 66 Cents.

Article Excerpt
- Raises 2007 Full-Year EPS Outlook to $2.35-$2.55 from $2.10-$2.30

- Year-over-Year EPS Increase Expected to be 44 Percent to 56 Percent Versus a Record $1.63 in 2006

WESTCHESTER, Ill., July 24 /PRNewswire-FirstCall/ -- Corn Products International, Inc. , a leading global provider of agriculturally derived ingredients for diversified markets, today reported record quarterly diluted earnings per share of $0.66 for the second quarter ended June 30, 2007, a 65 percent increase compared with diluted earnings per share of $0.40 a year ago. Net income of $51 million in the second quarter of 2007 improved 68 percent versus $30 million last year.

Net sales of $857 million in the second quarter of 2007, a record quarterly level, improved 33 percent versus $645 million in the prior-year period. The higher net sales were primarily the result of improved price/product mix, along with favorable volumes and foreign currency translations. The acquisitions of SPI Polyols, Getec and DEMSA contributed approximately $29 million of net sales in the second quarter.

Gross profit of $156 million in the second quarter of 2007 increased 49 percent versus $105 million a year ago. Gross margins expanded to 18.1 percent compared with 16.2 percent last year. The improvement was driven by significantly higher North and South American results, predominantly from higher pricing. Corn costs increased significantly, while energy costs were nominally higher.

Last year's second quarter was negatively impacted by two factors - the first step in the boiler tie-in at the Argo plant and a weak performance for Brazil.

Operating income of $91 million in the second quarter of 2007 grew 59 percent versus $57 million last year. Operating margins improved to 10.6 percent from 8.9 percent in 2006.

Higher net financing costs in the second quarter of 2007 of approximately $13 million were due in part to lower capitalized interest. The second- quarter effective tax rate of 32.8 percent compared favorably with 37.0 percent in 2006, reflecting a change in the earnings mix.

Overall, the Company's diluted earnings per share increase of 26 cents in the second quarter of 2007 was attributable to 24 cents per share from operating margins, 4 cents per share from the change in the annual effective tax rate, 2 cents per share from volumes and 2 cents per share from foreign currency translation. Higher financing costs reduced earnings per share by 4 cents, while increased shares outstanding and a higher minority interest each negatively impacted earnings per share by 1 cent.

Regional Business Segment Performance Regional results for the quarter ended June 30, 2007 were as follows: North America

Net sales of $534 million increased 34 percent versus $398 million in 2006 primarily due to improved price/product mix, as well as slightly favorable volumes and foreign currency translation. Operating income of $68 million grew 85 percent from $37 million last year. All three country...

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