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Ingredion Drops After Cutting Forecast on Argentina Margins

July 15 (Bloomberg) -- Ingredion Inc., North America’s fourth-largest maker of high-fructose corn syrup, fell the most in more than four years after cutting its profit forecast because of shrinking margins in South America.

The shares dropped 9.9 percent to $62.57 at the close in New York, the biggest decline since Oct. 27, 2008. The shares had gained 51 percent in the year before today as the Westchester, Illinois-based corn processor topped analysts’ average earnings estimates for five-straight quarters.

Ingredion cut its projection for full-year profit to $5.10 to $5.40 a share from $5.60 to $6, the company said yesterday in a statement. Second-quarter earnings excluding one-time items are expected to be $1.15 to $1.20 a share. That compares with the $1.32 average of nine analysts’ estimates compiled by Bloomberg.

Growth in Argentina has been lower than expected and government policies have curbed Ingredion’s ability to pass on higher raw-material prices to customers, the company said. Brazil’s economy is “more stagnant” than expected and has affected sales to the brewing industry. The two countries accounted for 17 percent of the company’s revenue last year, according to data compiled by Bloomberg.

“Argentina has moved into a rather severe situation that has placed significant pressure on our results in the region,” Chairman and Chief Executive Officer Ilene Gordon said today on a conference call with analysts.

Foreign Exchange

Ingredion’s shares and earnings per share have more than doubled since Gordon took the helm on May 4, 2009. She increased its product portfolio with the acquisition of National Starch & Chemical Co. for $1.3 billion in October 2010 and boosted sales 78 percent in the three years through December 2012. The company’s name was changed to Ingredion under Gordon from Corn Products International to reflect its focus on ingredients.

“In addition to the headwinds cited by management, we see other negative issues impacting the company’s results including unfavorable foreign exchange,” David Driscoll, a New York-based analyst for Citigroup Inc, said in a report today. “With difficulties in passing through price increases in South America, unfavorable movements in foreign exchange add another layer to the company’s difficulties.”

Currency will negatively affect full-year earnings by 20 to 25 cents a share, up from an earlier forecast of 15 to 20 cents a share, Cheryl Beebe, Ingredion’s chief financial officer, said during the call.

The largest North American high-fructose corn syrup makers are Cargill Inc., Archer-Daniels-Midland Co. and Tate & Lyle Plc.

To contact the reporter on this story: Simon Casey in New York at

To contact the editor responsible for this story: Simon Casey at

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