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From Staff Reports
Brokerage Bear Stearns Cos. (NYSE: BSC) yesterday (Tuesday) upgraded gum-and-candy maker Wm Wrigley Jr. Co. (NYSE: WWY) to “peer perform” from “underperform,” citing Wrigley’s better-than-expected competitive response to a competitive threat from rival Cadbury Schweppes (NYSE: CSG), as well as ongoing momentum in the developing markets and continued success with new products.
Wrigley was one of the companies cited in a recent Money Morning investment report that identified U.S. companies whose overseas successes were more-than-offsetting any malaise in their home U.S. marketplace. [To read that free report – “The Votes Are in: Global Gains Trump Domestic Pains” – and to see some of the companies we’ve identified, click here].
We found that the shrewdest, and most-aggressive U.S. firms are even re-shaping their product portfolios to appeal to cultural and local consumer tastes. Wrigley – long an international company – fits that bill almost to perfection. In China, for instance, Wrigley infused its traditional products with traditional Chinese medicine to create alternative “flavors” — “beauty” gum, “cooling” gum and “relaxation” gum. The result: double-digit growth and runaway market dominance in that product category in China.
At the very end of July, Wrigley said that growing international sales and a weak U.S. dollar helped propel its second-quarter profits up by 21%. The confectioner said that its net income rose to $169.8 million, or 61 cents per share, during the April-through-June quarter. That's up from $140.6 million, or 51 cents per share, in the year-ago period. Results included a one-cent per share charge related to restructuring of its supply chain.
Revenue surged a better-than-expected 14%, rising from $1.21 billion last year to $1.38 billion in the second quarter of this year, handily beating Wall Street expectations.