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QUAKER REPORTS 35 PERCENT INCREASE IN SECOND QUARTER EARNINGS

 QUAKER REPORTS 35 PERCENT INCREASE IN SECOND QUARTER EARNINGS
 CHICAGO, Jan. 23 /PRNewswire/ -- The Quaker Oats Company (NYSE: OAT) today reported earnings per share from continuing operations of 58 cents for the second quarter of fiscal 1992 ended Dec. 31, 1991, a 35 percent increase above last year's 43 cents.
 Consolidated sales of $1.34 billion were 4 percent above last year's $1.29 billion, while consolidated volume was up 5 percent. Consolidated operating income of $107 million was 24 percent above the prior year's $86.1 million. Income from continuing operations was $44.7 million compared to $33.1 million last year. Net income in the prior year was $3.1 million, or 3 cents per share, including an after-tax provision of $30 million, or 40 cents per share, for discontinued operations (Fisher- Price).
 William D. Smithburg, chairman, president and chief executive officer, said, "The second-quarter results are a continuation of the same positive trends that have characterized our businesses in recent quarters -- strong volume growth both domestically and internationally, improved operating margins and strong asset management."
 For the first six months of fiscal 1992, earnings per share from continuing operations were $1.12, up 32 percent from 85 cents a year ago. Six-month sales of $2.70 billion were 3 percent above last year's $2.62 billion, on volumes which were 6 percent higher. Six-month operating income of $206.6 million was 18 percent above the prior year's $175.4 million.
 Six-month income from continuing operations was $87.1 million compared to $66.3 million last year. Net income in the prior year was $36.3 million, or 45 cents per share, including the provision for discontinued operations mentioned above.
 "'We're very pleased with the first-half results and expect fiscal 1992 as a whole to be a good year for Quaker," Smithburg said. "The competitive challenges we're facing in some of our key categories, however, are likely to moderate the pace of earnings growth in the second half."
 U.S. and Canadian Grocery Products
 Operating income in the second quarter for U.S. and Canadian grocery products was $77.1 million, or 17 percent above the $66 million recorded a year ago. The operating income improvement reflected continued strong volume trends and higher margins, due to lower commodity costs and efficiency enhancement measures. Sales of $904.6 million were 5 percent above last year. Overall unit volumes were up 4 percent in the quarter, led by double-digit increases in Gatorade and pet foods and strong performances by food service and Golden Grain. Volumes for cereals were below a year ago, but operating income was up substantially for that business in the quarter. Advertising and merchandising expenditures were $7 million above last year but slightly lower as a percentage of sales.
 International Grocery Products
 Operating income for international grocery products in the quarter was $29.9 million, up 49 percent from last year's $20.1 million, reflecting increases in both Latin America and Europe. Sales of $438.2 million were slightly above the prior year's $432.1 million. Overall unit volumes were up 7 percent in the quarter, led by strong increases in Latin America and pet foods in Europe.
 Financing
 Net financing costs (interest expense and foreign exchange) are $5 million lower than last year, largely reflecting lower commercial paper borrowings due to aggressive asset management.
 The average number of shares outstanding in the quarter was 75.7 million, equal to a year ago.
 Quaker is an international marketer of foods, pet foods and beverages.
 QUAKER OATS COMPANY
 Consolidated Statements of Income and Reinvested Earnings
 (Unaudited; dollars in millions, except per-share data)
 Periods ended Three Months Six Months
 Dec. 31 1991 1990 1991 1990
 Net Sales $1,342.8 $1,293.8 $2,698.6 $2,620.3
 Cost of goods sold 691.5 689.0 1,385.5 1,374.2
 Gross profit 651.3 604.8 1,313.1 1,246.1
 Selling, general and
 administrative
 expenses 544.3 521.1 1,094.8 1,069.2
 Interest expense - net 14.4 22.6 34.4 45.6
 Other expense - net 14.3 3.6 31.8 17.7
 Income from continuing
 operations before
 income taxes 78.3 57.5 152.1 113.6
 Provision for
 income taxes 33.6 24.4 65.0 47.3
 Income from
 continuing operations 44.7 33.1 87.1 66.3
 (Loss) from
 discontinued operations
 -- net of tax -- (30.0) -- (30.0)
 Net income 44.7 3.1 87.1 36.3
 Preferred dividends
 -- net of tax 1.0 1.0 2.1 2.1
 Net income available
 for common $43.7 $2.1 $85.0 $34.2
 Per common share:
 Income from continuing
 operations 0.58 0.43 1.12 0.85
 (Loss) from discontinued
 operations -- (0.40) -- (0.40)
 Net income 0.58 0.03 1.12 0.45
 Dividends declared 0.43 0.39 .86 .78
 Average number of common
 shares outstanding
 (in thousands) 75,675 75,740 75,975 75,685
 Reinvested earnings:
 Balance beginning
 of period $1,056.0 $1,167.3 $1,047.5 $1,164.7
 Net income 44.7 3.1 87.1 36.3
 Dividends (33.4) (30.6) (67.3) (61.2)
 Balance end of
 period $1,067.3 $1,139.8 $1,067.3 $1,139.8
 Net Sales and Operating Income by Segment
 (Unaudited; dollars in millions)
 Three months Net Sales Operating Income
 ended Dec. 31 Pct. Pct.
 Incr. Incr.
 1991 1990 (Decr.) 1991 1990 (Decr.)
 U.S. and Canadian
 Grocery products $904.6 $861.7 5.0 $77.1 $66.0 16.8
 International
 Grocery products 438.2 432.1 1.4 29.9 20.1 48.8
 Total sales/
 operating inc. $1,342.8 $1,293.8 3.8 $107.0 $86.1 24.3
 Less: General corporate expenses 10.9 5.5
 Interest expense - net 14.4 22.6
 Foreign exchange loss - net 3.4 0.5
 Income from continuing operations
 before income taxes $78.3 $57.5
 Net Sales and Operating Income by Segment
 (Unaudited; dollars in millions)
 Six months Net Sales Operating Income
 ended Dec. 31 Pct. Pct.
 Incr. Incr.
 1991 1990 (Decr.) 1991 1990 (Decr.)
 U.S. and Canadian
 Grocery products $1,877.2 $1,810.6 3.7 $169.3 $141.9 19.3
 International
 Grocery products 821.4 809.7 1.4 37.3 33.5 11.3
 Total sales/
 operating income $2,698.6 $2,620.3 3.0 $206.6 $175.4 17.8
 Less: General corporate expenses 15.6 13.2
 Interest expense - net 34.4 45.6
 Foreign exchange loss - net 4.5 3.0
 Income from continuing operations
 before income taxes $152.1 $113.6
 -0- 1/23/92
 /CONTACT: Ronald G. Bottrell, 312-222-7388, for Quaker Oats/
 (OAT) CO: Quaker Oats Company ST: Illinois IN: FOD SU: ERN


CK -- NY035 -- 2723 01/23/92 10:56 EST
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Date:Jan 23, 1992
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