Printer Friendly

QUAKER ANTICIPATES LOWER-THAN-EXPECTED RESULTS FOR THE THIRD QUARTER AND YEAR; ANNOUNCES STOCK REPURCHASE AUTHORIZATION

QUAKER ANTICIPATES LOWER-THAN-EXPECTED RESULTS FOR THE THIRD QUARTER
 AND YEAR; ANNOUNCES STOCK REPURCHASE AUTHORIZATION
 CHICAGO, April 9 /PRNewswire/ -- The Quaker Oats Co. said today that its third quarter earnings for the period ending March 31, 1992, could be 10 to 15 percent below last year's 82 cents per share. The earnings decline is primarily due to lower volumes for the company's ready-to-eat cereals and Gatorade thirst quencher businesses, as well as higher marketing expenditures for both the U.S. and Europe.
 William D. Smithburg, chairman, president and CEO, said, "Overall, our U.S. and Latin American businesses continue to generate good consumer sales and market shares. Strong first-half results will still enable us to report nine month earnings above last year." For the first half of fiscal 1992, Quaker reported income from continuing operations of $1.12 per share, or 32 percent better than last year's 85 cents. Third quarter results will be reported on April 23.
 Smithburg said, "We continue to see positive results from our Supply Chain Management program, which is designed to improve customer service while lowering overall costs, improving margins and better utilizing our assets, thereby substantially improving cash flow. The next phase of the Supply Chain Management program is a change in the timing of trade promotions, which is partially responsible for lower shipments in the third quarter and which will have the effect of reducing fourth quarter sales and earnings while increasing fiscal 1993 first-half results.
 "Our reasons for adjusting the timing of our trade promotions are to more closely reflect consumer demand and to derive greater efficiencies in production, distribution and inventory management. As a result, we will be leveling the peaks and valleys in our production and shipping schedules, which will contribute to a more balanced quarterly earnings pattern. I want to emphasize that this change affects the timing of our trade promotions, but not our level of merchandising expenditures," Smithburg said.
 "There are both operational and financial advantages to this change," he noted. "Quaker will be able to reduce working capital investment, operating costs and capital expenditures, and will also realize a permanent tax deferral of $20 million. However, the timing change in promotional expenditures will reduce fourth quarter sales in fiscal 1992 by approximately $100 million, resulting in an estimated one time reduction in earnings of 35 to 45 cents per share. Since the first half of fiscal 1993 should benefit from the timing change, we don't anticipate a negative effect on results for the 1992 calendar year. Viewed over the fiscal 1991 through 1993 period, the company still expects to achieve, on average, an annual "real" earnings per share growth target of seven percent per year."
 Stock Repurchase Authorization
 "As a sign of confidence in the company's future and our continuing strong cash flow, the board of directors has authorized the repurchase of up to two million shares of outstanding Quaker common stock," Smithburg said. "As we have stated at the outset of previous share buy-back programs, our strong cash flow provides us an opportunity to gradually increase our leverage, which will lower our cost of capital and create more value for our shareholders."
 The repurchase will be accomplished from time to time through open market purchases and privately negotiated transactions. The repurchased shares will become treasury shares and will be used for general corporate purposes. A seven million share repurchase program authorized in July 1989 was completed in February 1992, with 3.3 million shares repurchased this fiscal year. Quaker has approximately 73.5 million common shares outstanding.
 Quaker is an international marketer of food, pet food and beverages.
 -0- 4/9/92
 /CONTACT: Ronald G. Bottrell of Quaker, 312-222-7388/
 (OAT) CO: Quaker Oats Co. ST: Illinois IN: FOD SU: ERP


SM -- NY017 -- 6610 04/09/92 09:09 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 9, 1992
Words:632
Previous Article:SHOPKO STORES REPORTS MARCH SALES
Next Article:WAL-MART REPORTS MARCH SALES


Related Articles
QUAKER ANNOUNCES THREE MILLION SHARE STOCK REPURCHASE PROGRAM
Kirby Announces Anticipated Revenues for the Third Quarter of 1997
Herman Miller, Inc. Lowers Outlook Due to Softening in Order Demand In Its Fiscal Third Quarter/Announces an Additional $100 Million Share Repurchase...
FMC Expects Operating Earnings to be on 10 Percent Growth Track for Full Year; Company Expects to Announce Lower Third Quarter Operating Earnings,...
Midwest Express Holdings Expects Lower Second and Third Quarter Earnings; Board Approves $15 Million Share Repurchase Program.
Herman Miller, Inc., Lowers Outlook Due to Softening in Order Demand; Announces Additional $100 Million Share Repurchase Authorization.
Kirby Corporation 2001 Third Quarter Net Earnings Guidance Increased To $0.45 - $0.47 Per Share.
Ryland Announces Share-Repurchase Authorization and Earnings Estimate for 2002.
Kimberly-Clark Board Approves Plan to Spin-Off Technical and Fine Paper Businesses and Canadian Pulp Operations.
STERIS Corporation Announces New $300 Million Share Repurchase Authorization.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters