WESTCHESTER, Ill. (AP) — Food ingredient maker Corn Products International Inc. said Tuesday that its first-quarter profit fell as costs rose faster than revenue. But the results beat Wall Street expectations, and the company said it expects earnings to rise in the second half of the year.
Corn Products' net income was down 39 percent during the first quarter, in part because a large trade settlement last year boosted profit then.
The company said that during the three months ended March 31, it earned net income of $94.2 million, or $1.21 per share, down from $153.6 million, or $1.97 per share, in the same period the year before.
Excluding one-time charges like restructuring costs, the company reported adjusted net income of $1.26 per share. Analysts, on average, had been expecting adjusted net income of $1.22 per share, according to data provider FactSet.
Last year's quarter included a 75-cent gain from a settlement with the government of Mexico under the North American Free Trade Agreement.
Revenue during the quarter rose 8 percent to $1.57 billion from $1.46 billion the year before as the company raised prices. Analysts expected $1.58 billion in revenue.
But the cost of sales rose more than revenue, 10 percent, to $1.28 billion.
CEO Ilene Gordon said Corn Products raised prices to offset some of the higher cost of raw materials. Hedging contracts should help offset some costs in the second half of the year, the company said.
"Our overall business fundamentals remain favorable," Gordon said in a statement, adding that she expected most of the year's growth to come in the second half of 2012.
Corn Products, which plans to change its name to Ingredion to better reflect its business, supplies a range of industries with starch and sweetener ingredients.
The Westchester, Ill., company backed its earnings guidance for 2012, saying it still expects to earn adjusted net income between $5 per share and $5.25 per share. Analysts are expecting adjusted net income of $5.16 per share.
Citi analyst David Driscoll noted that price increases were "robust" across all geographic regions and volumes rose overall. He was optimistic about future growth and maintained a "Buy" rating and $77 target price.
Shares slipped 38 cents to close at $56.68. That's close to the company's 52-week high of $59.50 per share, reached in July.