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QUAKER REPORTS LOWER THIRD-QUARTER RESULTS

 QUAKER REPORTS LOWER THIRD-QUARTER RESULTS
 CHICAGO, April 23 /PRNewswire/ -- The Quaker Oats Company


(NYSE: OAT) today reported earnings per share from continuing operations of 75 cents for the third quarter of fiscal 1992 ended March 31, 1992, a 9 percent decline from last year's 82 cents. Consolidated sales of $1.34 billion were essentially even with last year. Consolidated operating income of $121.5 million was 13 percent below last year's $140 million.
 William D. Smithburg, chairman, president and chief executive officer, said, "The earnings decline was primarily due to lower domestic volumes for ready-to-eat cereals and Gatorade thirst quencher, as well as higher marketing expenditures in the U.S. and Europe. Total company volumes were down 3 percent in the quarter, although consumer sales and market shares at the retail level remain strong for the core brands in our U.S. and Latin American businesses."
 For the nine-month period ended March 31, earnings per share from continuing operations were $1.87, or 12 percent above last year's $1.67. Nine-month sales of $4.03 billion were 2 percent above last year's $3.95 billion. Nine-month operating income of $328.1 million was 4 percent above the prior year's $315.4 million. Overall unit volumes were 3 percent above last year's level.
 U.S. and Canadian Grocery Products.
 Operating income in the third quarter for U.S. and Canadian Grocery Products was $95.3 million, or 13 percent below the $109.2 million recorded last year. The operating income decline was attributable largely to lower sales of ready-to-eat cereals and Gatorade thirst quencher, which more than offset strong operating income gains in hot cereals. "The extension of the timing of our Gatorade trade promotions beyond March 31 this year is a key factor in Gatorade's lower volume in the quarter," Smithburg said. On April 9, the company announced a change in the timing of its trade promotions in order to more closely reflect consumer demand and to derive greater efficiencies in production, distribution and inventory management.
 Sales of $914.3 million were 2 percent below last year's $931 million. Overall unit volumes were 6 percent below a year ago, despite a strong performance by the Food Service Division. Advertising and merchandising expenditures were above last year and higher as a percentage of sales, reflecting in part increased spending for ready- to-eat cereals, including the introduction of Low Fat Quaker 100pct Natural Cereal. Included in the results for the quarter is an $11 million pretax gain on the sale of the Ghirardelli chocolate business, which is largely offset by pretax restructuring charges totalling $10 million.
 International Grocery Products.
 Operating income for International Grocery Products in the quarter was $26.2 million, or 15 percent below last year's $30.8 million. Sales of $420.9 million were 4 percent above last year on a unit volume gain of 6 percent, reflecting very strong growth in Latin America, as well as gains for Pet Foods and Gatorade in Europe. Improved profitability in Latin America was more than offset by lower operating income in Europe, due in part to higher marketing expenditures for Pet Foods and Gatorade.
 Looking ahead to the remainder of fiscal 1992 and fiscal 1993, Smithburg said, "As a result of the change in timing of trade promotions, we expect fourth-quarter sales to be reduced by approximately $100 million, resulting in an estimated reduction in earnings of 35 to 45 cents per share. However, since the first half of fiscal 1993 will benefit from the timing change, we don't anticipate any significant impact on results for the 1992 calendar year. We expect calendar 1992 and fiscal 1993 to be in line with the mainstream of Wall Street's current estimates and consistent with Quaker's goals."
 In his remarks to financial analysts in New York today, Smithburg said, "Our April 9 announcement concerning the authorization to repurchase two million shares of common stock is a sign of confidence in the strength of our business and our cash flows."
 The average number of shares outstanding in the quarter was 73.9 million compared to 76 million last year.
 Quaker is an international marketer of foods, pet foods and beverages.
 THE QUAKER OATS COMPANY AND SUBSIDIARIES


Condensed Statements of Consolidated Income and Reinvested Earnings
 (unaudited -- millions of dollars except per share data)
 Three Months Ended March 31 1992 1991
 Net Sales $1,335.2 $1,334.6
 Cost of goods sold 674.6 682.3
 Gross profit 660.6 652.3
 Selling, general and
 administrative expenses 540.6 517.3
 Interest expense - net 18.4 20.3
 Other expense - net 4.8 --
 Income from continuing
 operations before
 income taxes 96.8 114.7
 Provision for income taxes 40.2 51.6
 Income from continuing
 operations 56.6 63.1
 (Loss) from discontinued
 operations - net of tax -- --
 Net income 56.6 63.1
 Preferred dividends - net of tax 1.1 1.1
 Net Income Available for Common $ 55.5 $ 62.0
 Per Common Share:
 Income from continuing
 operations $ 0.75 $ 0.82
 (Loss) from discontinued
 operations -- --
 Net income $ 0.75 $ 0.82
 Dividends declared $ 0.43 $ 0.39
 Average Number of Common
 Shares Outstanding
 (in thousands) 73,935 76,012
 Reinvested Earnings:
 Balance beginning of period $1,067.3 $1,139.8
 Net income 56.6 63.1
 Dividends (32.8) (30.9)
 Balance end of period $1,091.1 $1,172.0
 Nine Months Ended March 31 1992 1991
 Net Sales $4,033.8 $3,954.9
 Cost of goods sold 2,060.1 2,056.5
 Gross profit 1,973.7 1,898.4
 Selling, general and
 administrative expenses 1,635.4 1,586.5
 Interest expense - net 52.8 65.9
 Other expense - net 36.6 17.7
 Income from continuing
 operations before
 income taxes 248.9 228.3
 Provision for income taxes 105.2 98.9
 Income from continuing
 operations 143.7 129.4
 (Loss) from discontinued
 operations - net of tax -- (30.0)
 Net income 143.7 99.4
 Preferred dividends - net of tax 3.2 3.2
 Net Income Available for Common $ 140.5 $ 96.2
 Per Common Share:
 Income from continuing
 operations $ 1.87 $ 1.67
 (Loss) from discontinued
 operations -- (0.40)
 Net income $ 1.87 $ 1.27
 Dividends declared $ 1.29 $ 1.17
 Average Number of Common
 Shares Outstanding
 (in thousands) 75,284 75,801
 Reinvested Earnings:
 Balance beginning of period $1,047.5 $1,164.7
 Net income 143.7 99.4
 Dividends (100.1) (92.1)
 Balance end of period $1,091.1 $1,172.0
 (Millions of Dollars)
 Net Sales
 Three Months Percent
 Ended Increase
 March 31 1992 1991 (Decrease)
 U.S. & Canadian
 Grocery Products $ 914.3 $ 931.0 (1.8 percent)
 International Grocery
 Products 420.9 403.6 4.3 percent
 Total Sales $1,335.2 $1,334.6 --
 Operating Income
 Three Months Percent
 Ended Increase
 March 31 1992 1991 (Decrease)
 U.S. & Canadian
 Grocery Products $ 95.3 $ 109.2 (12.7 percent)
 International Grocery
 Products 26.2 30.8 (14.9 percent)
 Total Operating Income $ 121.5 $ 140.0 (13.2 percent)
 Less: General corporate
 expenses 6.2 9.3
 Interest expense-net 18.4 20.3
 Foreign exchange
 (gain) loss-net 0.1 (4.3)
 Income from continuing
 operations before
 income taxes $ 96.8 $ 114.7
 (Millions of Dollars)
 Net Sales
 Nine Months Percent
 Ended Increase
 March 31 1992 1991 (Decrease)
 U.S. & Canadian
 Grocery Products $2,791.5 $2,741.6 1.8 percent
 International Grocery
 Products 1,242.3 1,213.3 2.4 percent
 Total Sales $4,033.8 $3,954.9 2.0 percent
 Operating Income
 Nine Months Percent
 Ended Increase
 March 31 1992 1991 (Decrease)
 U.S. & Canadian
 Grocery Products $ 264.6 $ 251.1 5.4 percent
 International Grocery
 Products 63.5 64.3 (1.2 percent)
 Total Operating Income $ 328.1 $ 315.4 4.0 percent
 Less: General corporate
 expenses 21.8 22.5
 Interest expense-net 52.8 65.9
 Foreign exchange
 (gain) loss-net 4.6 (1.3)
 Income from continuing
 operations before
 income taxes $ 248.9 $ 228.3
 -0- 4/23/92
 /CONTACT: Ronald G. Bottrell of Quaker Oats, 312-222-7388/
 (OAT) CO: Quaker Oats Company ST: Illinois IN: FOD SU: ERN


SH -- NY020 -- 1726 04/23/92 10:01 EDT
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