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Ingredion Reports Great Q1-16

|Includes: Ingredion, Inc. (INGR)

Ingredion Incorporated (INGR) announced Q1-16 reported and adjusted EPS of $1.73 and $1.74.

The prior projections from Yahoo:

Earnings Est Current Qtr.
Mar 16
Next Qtr.
Jun 16
Current Year
Dec 16
Next Year
Dec 17
Avg. Estimate 1.39 1.64 6.42 7.00
No. of Analysts 7.00 7.00 8.00 8.00
Low Estimate 1.33 1.57 6.31 6.82
High Estimate 1.43 1.73 6.50 7.21
Year Ago EPS 1.30 1.53 5.88 6.42

INGR raised 2016 adjusted EPS guidance range to $6.45-$6.75 from previous range of $6.20-$6.60. The midpoint of the prior guidance was $6.40 - which is in close alignment to the prior consensus projection. I would conservatively project the consensus 2016 projection to rise to the new midpoint of $6.60.

Q1-16 net sales were $1.360 billion compared to $1.330 billion in Q1-15. The negative effect of foreign exchange subtracted $113 million from sales while volume increased sales by $60 million and improvements in pricing and mix of sales added $83 million.

First quarter reported and adjusted operating income were $200 million and $201 million, respectively. These were 44 percent and 28 percent increases, respectively, compared to $139 million of reported operating income and $157 million of adjusted operating income in the first quarter of 2015.

The increase in adjusted operating income was primarily due to: acquisition-related volume growth; a better price/product mix in both our specialty and core ingredients; reduced costs resulting from our global optimization efforts; and cost synergies in North America related to the Penford acquisition. These positives were partially offset by the negative effect of foreign exchange and macroeconomic headwinds in South America, attributable to Argentina and Brazil.

Projection update of 4-29-16:

Earnings Est Current Qtr.
Jun 16
Next Qtr.
Sep 16
Current Year
Dec 16
Next Year
Dec 17
Avg. Estimate 1.65 1.78 6.48 7.06
No. of Analysts 7.00 7.00 8.00 8.00
Low Estimate 1.57 1.68 6.31 6.87
High Estimate 1.73 1.82 6.65 7.21

Disclosure: I am/we are long INGR.