Shares in US spice maker McCormick & Co. fell today (28 September) despite an increase in underlying quarterly profits on the back of higher sales from its consumer and industrial divisions.

The company posted third-quarter adjusted net income of US$92m for the three months to the end of August, up from $88.5m a year earlier.

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Reported net income was lower compared to last year’s $102.4m, which was boosted by the reversal of a tax accrual.

McCormick’s third-quarter sales increased 16% to $920.4m. Revenue from the company’s consumer business climbed 15%, while sales from its industrial division were up 17%.

Chairman, president and CEO Alan Wilson said the company was “pleased to report strong sales growth and solid profit performance”.

He added: “Sales grew at a double-digit rate in both our consumer and industrial segments driven by new products, distribution gains and an increased investment in brand marketing, as well as pricing actions taken in response to higher costs.”

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The McCormick chief said the company’s moves to improve productivity and cut costs under its Comprehensive Continuous Improvement programme are expected to lead to $50m of savings in the financial year.

He added: “As we head into our fourth quarter and fiscal year 2012, McCormick is facing further cost increases. These include higher costs for spices and herbs, such as pepper and cinnamon, as well as other ingredients. We continue to respond to these increases with a combination of pricing actions and our CCI cost savings, and we are on-track to achieve our profit goal for 2011.”

Shares in McCormick had fallen 1.66% to $46.90 at 12:32 ET.