UPDATE 2-Mead Johnson profit, forecast top expectations; shares jump
Jan 31 (Reuters) - Mead Johnson Nutrition Co reported higher-than-expected quarterly profit and gave an outlook that was better than many analysts had feared, sending the company's shares up 7 percent in premarket trade.
The maker of Enfamil baby formula, which gets a large portion of its revenue overseas, lost market share in China earlier in 2012 after it raised prices and a competitor offered aggressive promotions. Its North American business also struggled due to lower birth rates and a lingering impact from a contamination scare in late 2011.
"Clearly, this was a better quarter and guidance than many bears feared, including us," said JPMorgan analyst Ken Goldman, noting that his recent downgrade of the stock turned out to be "overly cautious for the time being."
Still, Goldman said he was not convinced that Mead Johnson was increasing its market share in China as profitably as it once was.
The company reported net earnings of $134.2 million, or 66 cents per share, in the fourth quarter, up from $85.6 million, or 42 cents per share, a year earlier.
Excluding special items such as information technology and severance costs, earnings were 72 cents per share. Analysts on average were expecting 68 cents, according to Thomson Reuters I/B/E/S.
Sales rose 8 percent to $981.1 million.
The company forecast 2013 earnings of $3.22 to $3.30 per share, excluding special items. Analysts had been expecting $3.33 per share.
Mead Johnson shares rose to $73 in premarket trade, up from a close on Wednesday at $68.15 on the New York Stock Exchange.
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.