Net income
and Diluted earnings per share in third quarter 2012 were $654 million
and $1.36, respectively. Net income and Diluted earnings per share in
third quarter 2011 were $643 million and $1.31, respectively.
Ian Cook, Chairman, President and Chief Executive Officer, commented on the results and outlook.
"We are very pleased to have achieved another quarter of strong profitability with gross profit margin, operating profit margin and net income as a percent to sales all increasing versus year ago, despite an intense competitive environment and challenging macroeconomic conditions worldwide," he said.
"We are very pleased to have achieved another quarter of strong profitability with gross profit margin, operating profit margin and net income as a percent to sales all increasing versus year ago, despite an intense competitive environment and challenging macroeconomic conditions worldwide," he said.
Hill's Pet Nutrition (13% of company sales):
- Decrease in sales of 1.5% during third quarter 2012
- Unit volume decrease 2.5%
- Pricing increase 4.0%
- Foreign exchange was negative 3.0%.
- Volume declines in the U.S., Japan and Europe were partially offset by volume gains in Russia, Canada and South Africa. Hill's organic sales increased 1.5% during the quarter
Hill's operating profit increased 16% in the third quarter 2012 to $147 million, or 27.8% of Net sales. This increase in Operating profit was due to an increase in Gross profit and a decrease in selling, general and administration expenses, both as a percentage of Net sales.This increase in Gross profit was driven by higher pricing and cost savings from the Company's funding-the-growth initiatives, which were partially offset by higher raw and packaging material costs. This decrease in selling, general and administrative expenses was primarily due to lower overhead expenses.
Recent new product introductions contributing to sales in the U.S. include Science diet Ideal Balance canine and feline, which combine natural ingredients with the power of advanced nutrition in one balanced package, Prescription Diet y/d Feline Thyroid Health, Science Diet Tender Dinners feline and Prescription Diet i/d Canine Low Fat GI Restore, specially formulated to help manage gastrointestinal disorders.
New pet food products contributing to international sales include reformulated Prescription Diet r/d Canine and Feline, the relaunch of Prescription Diet j/d Feline with improved taste, Prescription Diet y/d Feline Thyroid Health, reformulated Science Plan Adult and Mature Adult Canine and Feline with improved taste and the relaunch of Science Plan Nature's Best with upgraded ingredients and package design.
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