McCormick & Company (NYSE:MKC), a maker of food spices and seasonings, said Wednesday fourth quarter earnings were up 15% as it reaped benefits from its cost cutting program and product mix changes.
For the fourth quarter, the company earned $133.6 million, or 99 cents a share, up from $116.4 million, or 87 cents a share, for the year-ago period. Results for the year-ago period included a $7.8 million, or 4 cents per share, restructuring charge, the company said.
Revenues increased almost 6% year-over-year to $979.5 million.
The results topped analyst estimates of 96 cents a share on revenues of $937.26 million.
Gross margins for the whole year increased to 42.5% from 41.6% as the company pushed ahead with its cost cutting program. According to McCormick, savings due to the program reached $54 million in fiscal 2010, 35% more than its initial target for the year. The company said it aims to have cost savings of at least $40 million 2011.
Gross margins were also helped by a product mix change at the company's industrial business, which as a result, saw its operating margins increase to 7.8% from 6% a year ago.
For the quarter, the industrial business' revenues rose 7% year-over-year to $340.8 million, while the consumer business increased sales by 6% to $638.7 million.
The company said it expects revenues to grow between 5% to 7% in 2011, with three percentage points coming from price increases and another two to four percentage points coming from new products, brand marketing, and expanded distribution. Earnings per share are anticipated to be in the range of $2.80 to $2.85.
McCormick shares ended Wednesday down 3.37% at $44.76.