McCormick & Co. said yesterday that its first-quarter earnings per share jumped 61 percent, a performance that exceeded the expectations of securities analysts who follow the company.
The Hunt Valley-based company said it earned $15.2 million, or 37 cents a share, during the quarter that ended Feb. 28. The company earned $9.9 million, or 23 cents a share, in the first quarter of fiscal 1990.
"For a company that has given four years of positive earnings surprises, this is another one," said John McMillin, an analyst for Prudential-Bache Securities Inc. in New York. Mr. McMillin had expected McCormick to earn 30 cents a share for the quarter.
But while McCormick is looking forward to earnings growth for the full year, it won't be able to sustain 61 percent quarterly earnings jumps, company Chief Financial Officer James J.Harrison Jr. said.
"Our objective is to increase earnings per share by 15 percent" for the full year, said Mr. Harrison. McCormick earned $1.51 a share from continuing operations in fiscal 1990, which ended Nov. 30.
"We're comfortable with meeting our objective," Mr. Harrison said.
After yesterday's announcement, Mr. McMillin said McCormick is likely to earn $1.80 a share for the full year, up from his earlier estimate of $1.75. A 15 percent earnings gain would put the yearly total at $1.74 ashare.
The company said its profits were boosted by sharp gains in some of its non-core businesses, especially the farming unit that grows garlic and onions and the company's packaging business, which makes plastic bottles and tubes both for McCormick's spice divisions and for other companies.
The company's core domestic spice business also has been solid, Mr. Harrison said. He credited a recession that has people eating out less and cooking at home more. More home cooking is good for spice sales, Mr. Harrison said.
"In good times or recessionary times, people will eat," he said. "It's a question of where, and what type of food they eat."
Mr. Harrison said that McCormick's spice sales in Britain and to Pacific Rim companies have picked up smartly, though he declined to provide specifics. "The operations internationally have been a pleasant surprise."
Cost-cutting efforts helped profits to rise by far more than the modest 8 percent gain in revenues the company took in during the quarter, compared to the same quarter a year ago. Mr. Harrison said the company is dealing directly with more growers of spices and doing business with fewer wholesalers, allowing profit margins to widen.
"It's a company that keeps getting thinner and thinner, more efficient and more efficient," Mr. McMillin said.