Manufacturer of spices, herbs, and flavorings for retail, commercial, and industrial markets, McCormick & Company (NYSE: MKC) rose over 30 percent from its previous recent acquisitions and sales topping expectations. For its third quarter earnings, the company beat with EPS of $1.03 on revenue 1.09 billion, compared to expectations of $0.94 on in-lined revenues.
Lawrence E. Kurzius, President and CEO, stated, "Our strong third quarter financial results demonstrate the effective execution of our strategy. We are driving both sales growth and significant productivity improvements, and expect 2016 to be a record year for McCormick. The efforts and engagement of employees throughout the company are driving this performance.
For the fiscal year, the company expects to grow sales approximately 3%, which is at the upper end of its previous range. Excluding the estimated impact of unfavorable currency rates, the projected growth rate is approximately 6%. The company expects higher base business sales, new products, acquisitions and pricing to contribute to this growth rate.
Operating income is expected to grow approximately 17% from $548 million of operating income in 2015. This projection includes the impact of estimated special charges that relate to organization and streamlining actions, which are now estimated to be $14 million in 2016 compared to $66 million in 2015. Excluding the impact of special charges, the company expects to grow adjusted operating income approximately 7% from adjusted operating income of $614 million in 2015. Excluding the estimated impact of unfavorable currency rates, the expected year to year increase in adjusted operating income is approximately 10%.
The company increased its projected 2016 earnings per share to a range of $3.68 to $3.72. This compares to $3.11 of earnings per share in 2015. The estimated impact of special charges in 2016 is $0.07 compared to $0.37 in 2015. Excluding the impact of special charges, the projected range for adjusted earnings per share in 2016 is $3.75 to $3.79and compares to the previous guidance at the higher end of a $3.68 to $3.75 range. This latest projection is an increase of 8% to 9% from adjusted earnings per share of $3.48 in 2015. Excluding the estimated impact of unfavorable currency rates, the expected year to year increase in adjusted earnings per share is 12% to 13%. For the fiscal year 2016, another year of strong cash flow is anticipated, with plans to return a portion to McCormick's shareholders through dividends and share repurchases.