Ingredion Q3 Topline Misses Hit By Lower Corn Costs; Hints On Softer Volume Demand

Ingredion Inc INGR reported third-quarter FY23 sales growth of 1% year-on-year to $2.03 billion, missing the analyst consensus estimate of $2.114 billion.

The revenue increase was driven by both price mix and foreign exchange impacts, partially offset by volume declines.

Sales in North America increased 3% Y/Y to $1.3 billion, South America decreased 8% to $269 million, Asia-Pacific fell 2% to $272 million, and EMEA climbed 1% to $192 million.

Gross profit increased 13% Y/Y to $421 million, and the gross margin expanded 220 basis points to 20.7%.

The operating margin was 10.5%, and the operating income for the quarter was $213 million, a 17% Y/Y increase.

Adjusted EPS of $2.33 beat the consensus estimate of $1.95.

Ingredion held $341 million in cash and equivalents as of September 30, 2023. Cash from operating activities for nine months totaled $647 million.

"We continued to successfully manage our business in the third quarter with our approach to product pricing and customer mix, while also driving operational excellence and productivity to mitigate the impact of cost inflation," said President and CEO Jim Zallie.

Ingredion declared a quarterly dividend of $0.78 per share paid on October 24, 2023, representing a 10% increase from the prior quarterly dividend rate.

Outlook: Ingredion raised its FY23 adjusted EPS outlook from $8.80 - $9.40 to $9.05 - $9.45 against the consensus of $9.00.

INGR expects FY23 sales growth to be up mid-single-digits, reflecting softer volume demand (prior view: up mid to high single digits).

Capital expenditures for FY23 are expected to be about $310 million.

Price Action: INGR shares closed lower by 0.28% at $95.62 on Monday.