Glenview-based Mead Johnson Nutrition Co.'s stock sank Thursday after the infant formula maker said a safety scare in North America, weak European economies and an inventory reduction in China all affected its third-quarter performance.
The Glenview, Ill., company said its earnings slipped 3 percent, and it reported revenue that fell well short of analyst expectations. Mead Johnson also lowered its 2012 earnings forecast.
The company reported net income of $140.3 million, or 69 cents per share, in the three months that ended Sept. 30. That compares to $144.7 million, or 70 cents per share, a year ago. Adjusted earnings, which discount one-time items, were 71 cents per share. Analysts surveyed by FactSet expected, on average, earnings of 72 cents per share.
Revenue fell about 1 percent to $921.3 million from $933.9 million a year ago. Analysts expected $969.4 million in revenue.
Mead Johnson said sales from North American and Europe fell about 6 percent to $281.4 million, hurt in part by weak economic conditions in Europe. The company also said it lost market share in North America, and it attributed that to "unfounded media reports" from last December that alleged product contamination.
The company's stock tumbled late that month after stores pulled a batch of Enfamil Premium Newborn powered formula off their shelves following the death of a newborn who had been given the formula. The stock then rose a few days later after the Centers for Disease Control and Prevention and the Food and Drug Administration both said the formula was not tied to that death or three other cases of a bacterial infection.
Mead Johnson said Asia and Latin American sales climbed, but a planned distributor inventory reduction in China reigned in that growth.
The company also said Thursday it now expects full-year earnings to range between $3.02 and $3.07 per share, down from its previous forecast for $3.04 to $3.14. Analysts expect, on average, earnings of $3.10 per share.
Mead Johnson shares fell $6.45, or 9.3 percent, to $63.06 in afternoon trading Thursday. They are down 29 percent from their 52-week high of $88.72 in late June. They traded as low as $60.62 per share last December.