Scotts Raises Forecast in International Waters
The Scotts Co. raised its earnings forecast last week and said it was currently looking at options for its poorly international business performance, sending its shares up almost 7 percent, according to Reuters.
This information came on the coattails of the announcement that Michel Farkouh, the person responsible for the chemical company’s international business since November 2000, had decided to leave Scotts, a mutual agreement by both parties.
Due to the new revision of the position, Scotts is now expecting net income for its fiscal year, ending Sept. 30, to rise 13-16 percent from the previous year, when the company’s earnings were $114.7 million ($3.57 per share), according to Reuters. Scotts had previously forecast a rise of 10 percent also according to Reuters.
In a recent article, Reuters stated that Scotts increased its full-year sales growth forecast to approximately 7-8 percent, up from its prior forecast of around 6-7 percent. Scotts has said its international business would perform below expectations, with total sales down slightly for the year.
As far as Scotts third quarter, the company has stated that it expects its net income to go up 8-10 percent from last year, with sales a little bit ahead of its revised forecast for the full year.
Reuters stated that Scotts said it is refinancing $400 million of its outstanding term loans to lower interest costs. The new loans will modify many of the borrowing covenants giving the company additional operating flexibility. The chemical company said it plans to retire the current $500 million term loan facilities with the new loans plus $100 million of cash it currently has on hand.