http://www.morningstar.com/earnings/19011229-mead-johnson-nutrition-co-mjn-q3-2010.aspx

Mead Johnson Nutrition Co MJN
Q3 2010 Earnings Call Transcript

Transcript Call Date 10/28/2010

Operator: Good morning, ladies and gentlemen, and welcome to the Mead Johnson Nutrition Third Quarter Earnings Conference Call. My name is Fab, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. Following the prepared remarks there will be a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

At this time I would now like to turn the presentation over to Kathryn Chieger, Vice President Investor Relations of Mead Johnson Nutrition. Please proceed, madam.

Kathryn Chieger - VP, IR: Thank you, and good morning. Welcome to Mead Johnson's third quarter conference call. With me today at our global operations center in Evansville, Indiana are Steve Golsby, our CEO and Pete Leemputte, our CFO.

Before we get started, let me remind everyone that our comments will include forward-looking statements about our future results. Including statements about our financial prospects and projections, new product launches and market conditions that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Keep in mind that our actual results may differ materially from expectations as of today, due to various factors including those listed in our Annual Report on Form 10-K for 2009, quarterly reports on Form 10-Q, quarterly reports on Form 8-K and registration statements. In each case as filed with or furnished to the Securities and Exchange Commission and our earnings release issued this morning. All of which are available upon request are on our website at meadjohnson.com.

In addition, any forward looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates change. Given that we are in the midst of the earnings reporting season, we will be respectful of your time and keep our call to 45 minutes.

That said, I will turn the call over to Steve.

Stephen W. Golsby - President and CEO: Thank you, Kathryn and good morning everyone. As Kathryn mentioned we're speaking to you from Evansville, where this week I was pleased to participate in the grand opening of our new Pediatric Nutrition Institute. This state-of-the-art facility, which includes a scalable pilot plant, will further enhance our research and development capabilities and enable us to accelerate the pace of product innovation, one of the key elements in our growth strategy.

Turning to our financial results. This morning we reported another excellent quarter. Non-GAAP earnings per share were up 8% in the third quarter to $0.57 on 15% constant dollar sales growth. We are very pleased with our earnings performance given higher commodity and manufacturing costs along with an 18% increase in operating expenses.

Higher spending was primarily behind demand generation investments in advertising and promotions, and for an expanded sales force in China and selected other emerging markets, as well as costs to build our standalone company infrastructure.

Read our Earnings Call Transcript disclaimer.
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