GLENVIEW, Ill. (AP) — Mead Johnson posted a 26 percent jump in second-quarter profit Thursday thanks to booming sales of infant formulas in Latin America and Asia.
Mead Johnson's income and revenue surpassed Wall Street expectations, but the company confirmed that its growth in the key markets of Hong Kong and China has slowed down and that it has lost market share in those regions. The company expects slower growth in those markets for the rest of 2012.
While it maintained its annual net income forecast, the company expects diminished revenue growth excluding the effects of foreign currency exchange rates.
Shares of Mead Johnson Nutrition lost $3.74, or 5.1 percent, to $69.25 in morning trading.
Net income declined to $165.8 million, or 81 cents per share, from $132.1 million, or 64 cents per share. Excluding one-time costs the company said it earned 83 cents per share. Revenue grew 9 percent, to $1.01 billion from $932 million.
Analysts were projecting net income of 77 cents per share on revenue of $1 billion, according to FactSet.
Total revenue from Latin America and Asia rose 14 percent to $695.2 million, aided by a joint venture the company formed in Argentina earlier this year. China and Hong Kong have been important for Mead Johnson's revenue, but the company said in April that growth those markets was slower than last year and that business conditions had gotten more difficult.
While revenue in North America and Europe declined 1 percent to $317.1 million, Mead Johnson said its U.S. business improved significantly compared to the first quarter of 2012.
Mead Johnson is still forecasting $3.04 to $3.14 per share in adjusted net income for 2012. However it now expects revenue growth of 8 to 9 percent excluding the effects of foreign currency exchange rates. Previously the company expected growth of 9 to 11 percent.
Analysts estimate that Mead Johnson Nutrition Co. will earn $3.13 per share on average.