MEAD JOHNSON NUTRITI Reports Operating Results (10-Q)

MEAD JOHNSON NUTRITI (MJN, Financial) filed Quarterly Report for the period ended 2010-06-30.

Mead Johnson Nutriti has a market cap of $10.84 billion; its shares were traded at around $52.99 with a P/E ratio of 22.9 and P/S ratio of 3.8. The dividend yield of Mead Johnson Nutriti stocks is 1.8%.MJN is in the portfolios of Daniel Loeb of Third Point, LLC, Paul Tudor Jones of The Tudor Group, Lee Ainslie of Maverick Capital, Stanley Druckenmiller of Duquesne Capital Management, LLC, Steve Mandel of Lone Pine Capital, David Winters of Wintergreen Advisors, Edward Owens of Vanguard Health Care Fund, Eric Mindich of Eton Park Capital Management, L.P., John Paulson of Paulson & Co., Chris Davis of Davis Selected Advisers, Louis Moore Bacon of Moore Capital Management, LP, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors, Murray Stahl of Horizon Asset Management, RS Investment Management, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

Sales growth for the six months ended June 30, 2010, was 8%, including a favorable foreign exchange impact of 3%. We delivered growth of 18% in Asia and Latin America, partially offset by a 4% decline in North America/Europe. The drop in North America/Europe was largely driven by birth-related market contraction, along with a negative comparison to the prior year retail inventory build from new product launches. We expect growth in the North America/Europe segment to be positive in the second half of 2010 due to a favorable comparison in the United States from retail inventory movements in the third quarter of 2009 and new product launches in 2010 as well as from a 2009 reduction of customer inventory in the European business associated with the interim change in our distribution model.

Infant formula decreased 2%, including a favorable foreign exchange impact of 1%, reflecting decreases in the North America/Europe segment, which are predominantly infant formula markets. Childrens nutrition increased 28%, including a favorable foreign exchange impact of 5%, reflecting the strength of the business in the Asia/Latin America segment where over 90% of children nutrition sales are generated. The decline in other products is primarily driven by the expiration of a 2009 marketing services agreement under which we sold pharmaceutical products in two Asia markets on behalf of BMS.

Interest expense for the three months ended June 30, 2010, primarily represented interest incurred on $1.5 billion of notes. Interest expense has been reduced significantly due to lower interest rates on our refinanced debt combined with the benefit from fixed-to-floating interest rate swaps on a portion of that debt, and our reduction in debt. For the three months ended June 30, 2009, interest expense primarily represented interest incurred on $1.7 billion of notes. The average interest rate on our long-term debt, including the impact of the swaps, was 3.5% and 5.6% for the three months ended June 30, 2010 and 2009, respectively.

The effective tax rate (ETR) for the three months ended June 30, 2010 and 2009, was 24.1% and 28.8%, respectively. The difference in the rates is attributable primarily to the mix of earnings, the benefits of a tax ruling under which certain profits in the Netherlands are exempt from taxation, and managements assertion that certain foreign earnings and profits are permanently invested abroad.

Net earnings attributable to noncontrolling interests consisted of an 11% interest in our China legal entity and a 10% interest in our Indonesia legal entity held by third parties.

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