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Ingredion’s Fiscal 2Q16 Revenue: What Can We Expect?

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Revenue expectations for upcoming quarters

Analysts are expecting Ingredion’s (INGR) revenue to be $1.4 billion for fiscal 2Q16. That would be a slight fall of 1% compared to $1.5 billion in 2Q15.

The company missed estimates in all quarters of 2015 except 4Q15. For fiscal 3Q16 and 4Q16, revenue is expected to increase 1% each quarter. For fiscal 2016, analysts expect revenue to be around $5.6 billion, which is comparable to fiscal 2015.

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Outlook for 2016 and revenue contributors

Now let’s look at Ingredion’s sales expectations for fiscal 2016. It projects them to be comparable to 2015. But it also expects volume to decline slightly, given the sale of its Port Colborne, Canada, plant.

The company still expects growth in specialty volumes for the year. It expects unfavorable currency translation to be affected adversely by $0.30–$0.40 per share.

Ingredion earns revenue through the following four geographical segments:

  • North America
  • South America
  • Asia-Pacific
  • EMEA (Europe, the Middle East, and Africa)

The company’s North America segment accounts for 60%–65% of its total revenue every quarter. But for fiscal 2016, North America’s net sales are expected to increase, and volume is expected to be lower than 2015 levels due to the sale of Port Colborne.

Anticipated currency headwinds and slow economic growth are projected to cause sales in South America to decline compared to 2015. Volume growth in the EMEA region might slightly increase the segment’s net sales in fiscal 2016. Growth in its European business is projected to be driven by underlying investments in the region and Ingredion’s specialty ingredients portfolio.

Revenue estimates for peers

Ingredion’s peers in the packaged food industry include Archer-Daniels Midland (ADM), Bunge (BG), and ConAgra Foods (CAG). Below are the revenue estimates for these peers:

  • Archer-Daniels Midland: Revenue for fiscal 2Q16 is expected to fall 5%.
  • Bunge: Revenue for fiscal 2Q16 is expected to fall 7%.
  • ConAgra: Revenue for fiscal 1Q17 is projected to decline 2%.

To gain exposure to INGR, you can invest in the Vanguard Consumer Staples ETF (VDC) and the iShares Morningstar Mid-Cap Value (JKI), which invest 1% in INGR.

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