(Updates with analyst quote in fourth paragraph.)
Feb. 9 (Bloomberg) -- Tate & Lyle Plc, the maker of low- calorie sweetener Splenda, said it’s “on track” to meet forecasts in the year ending March 31 as the company posted “solid” third-quarter sales amid rising corn prices.
The specialty food-ingredients division increased sales, fueled by “good” growth in corn-based sweeteners and starches, the London-based company said in a statement today. Sales increases of sucralose, sold under the Splenda brand, slowed in the quarter, it said. Bulk-ingredient sales expanded because of increased demand from the U.S. and Mexico.
Chief Executive Officer Javed Ahmed has sold Tate’s sugar interests to focus on more-profitable units, including specialty food ingredients. The company plans to restart sucralose production at a mothballed plant in Alabama later this year as demand increases for Splenda. The manufacturer reiterated it expects to “deliver a good performance for the full year.”
The quarter “continues to add to management’s credibility and track record of building a less volatile and more reliable business model,” Dirk Van Vlaanderen, an analyst at Jefferies International, said in a note to clients today.
The company widened its corn sugar profit margins even after paying higher prices for corn, Ahmed said in a conference call with analysts. Corn prices rose yesterday in Chicago following speculation that the U.S. Department of Agriculture may lower its estimate for global stockpiles.
Tate & Lyle fell 0.7 percent to 690 pence at 8:31 a.m. in London.
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