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McCormick & Co. Inc. (NYSE:MKC), processed and packaged food maker, is all set to unveil its first quarter 2012 results on March 27, 2012, before the market opens. The Zacks Consensus Estimate for the first quarter is 53 cents (year-over-year decrease of 7%), which is within the company’s guidance range of 51 – 54 cents per share. The Zacks Consensus Revenue Estimate for the first quarter is $868 million (year-over-year increase of 11.0%).

Fourth Quarter Overview

McCormick’s fourth-quarter 2011 earnings (excluding an unfavorable impact from transaction costs of 5 cents related to the completion of the Kamis acquisition and Kohinoor joint venture) were $1.03 per share, which surpassed the Zacks Consensus Estimate of 97 cents and the prior-year quarter’s 99 cents per share.

Total revenue in the fourth quarter grew 13% year over year to $1.11 billion from the year-ago quarter, benefiting from McCormick’s favorable volume, product mix, pricing actions and favorable currency rates translation. Revenue also exceeded the Zacks Consensus Estimate of $1.09 billion.

Agreement of Estimates Revision

Over the past 7 days, all the 11 analysts covering McCormick have left their earnings estimates for the first quarter of 2012 unchanged. Similarly, earnings estimates were unmoved for the fiscal 2012 by its 12 analysts over the same period.

Over the past 30 days, only one of the 11 analysts covering McCormick has revised his earnings estimate for the first quarter of 2012 in a negative direction. Earnings estimates for 2012, however, remained unchanged over the last 30 days.

McCormick earnings are facing increasing pressure from rising raw material costs. The rising input costs along with a negative impact from currency changes are expected to hit the company’s earnings hard in the first quarter of 2012.

Magnitude of Estimate Revisions

Given the lack of revisions, the earnings estimate for the first quarter as well as fiscal 2012 have remained static over the past 7 days at 53 cents and at $3.04 per share, respectively. The estimates also remained the same for the quarter as well as fiscal year 2012 over the past 30 days.

Surprise History

McCormick has surpassed earnings estimates in all of the last four quarters. The company has recorded a maximum positive surprise of 6.19% in the fourth quarter of 2011. On average, the earnings surprise was 4.46%.

Our Recommendation

McCormick, which competes with ConAgra Foods, Inc. (NYSE:CAG) and Kraft Foods Inc. (KFT), currently has a Neutral recommendation. The stock carries a Zacks #3 Rank (a short-term ‘Hold’ rating).

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Source: McCormick & Company: Earnings Preview