| Wrigley
profit surges by 37% - Strong currencies
in Europe boost results Wm. Wrigley
Jr. Co., which hopes to be known for more
than its namesake gum as it is pushing
into new product lines, reported Tuesday
that strong fourth-quarter sales helped
push worldwide sales to a record for the
year.
Chicago-based Wrigley easily beat Wall
Street estimates in reporting that fourth-quarter
net income, excluding restructuring of
5 cents per share and 2 cents per share
for the expensing of stock options, rose
to 53 cents per share from 42 cents per
share a year earlier.
The company said including charges it
earned $128.8 million, or 46 cents per
share, up 37 percent from the same period
last year, when it earned $94.1 million,
or 33 cents per share.
Sales during the quarter rose to $1.22
billion from $1.11 billion.
The company's performance was aided by
stronger European currencies, which added
2 cents per share to the fourth quarter.
Worldwide sales for the year rose nearly
13 percent, to $4.69 billion.
Analysts, on average, were looking for
earnings of 49 cents, according to a survey
by Thomson Financial.
Wrigley shares rose 95 cents, nearly
2 percent, to $52.27 on the New York Stock
Exchange on the news.
"We delivered solid results overall
in 2006 and demonstrated the strength
of our business," said Bill Wrigley
Jr., executive chairman of the company.
"We delivered earnings per share
growth in the 9 to 11 percent range for
the seventh consecutive year and we did
so with double-digit sales and volume
growth while completing the integration
of a major acquisition, realigning our
supply chain, and addressing the increased
competition in some key geographies,"
Wrigley said, acknowledging tougher competition
from Cadbury Schweppes.
Seeking to blunt Cadbury's aggressiveness,
Wrigley said it is launching two new gums
in the United Kingdom, including one that
will offer "enhanced dental benefits."
In China, the company said it would be
introducing a gum "featuring wellness
benefits based on traditional Chinese
medicine."
Cadbury said last week that it plans
to spend nearly $20 million to back the
launch of its gum in the United Kingdom,
where it has not competed with Wrigley.
Wrigley holds about 98 percent of the
UK market.
Mitchell Corwin, an analyst with Morningstar
Inc., said the United States "remained
a trouble spot" for the company during
the quarter."
"The U.S was basically flat year-over-year
as Wrigley continued to struggle domestically,"
he said, noting that the company performed
well in Europe, which had a positive impact
upon the company's overall fortunes.
Wrigley said its sales rose 19 percent
in its largest region, Europe, the Middle
East, Africa and India. But sales in the
U.S. were up 1 percent, "as declines
in sales of sugared gum brands significantly
offset sugar-free gains. Sales were essentially
flat across North America, the company
said. Sales in Asia rose 18 percent due
to "double-digit" growth in
shipments in China and Hong Kong.
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