"Commodity costs" refers to the expenses associated with buying basic goods or raw materials, such as food, energy, or metal. It represents the money spent on acquiring these commonly traded items used in different industries or daily life.
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The household products maker also saw revenue beat estimates, but did see its profit margins impacted by
higher commodity costs.
Rising commodity costs also led to reduced profitability, since the company couldn't raise prices given the tough selling environment.
Food prices are determined by the cost of production and manufacturing and are affected by changes
in commodity costs, as well as production, including sustainability efforts.
The
extra commodity costs weren't in their original 2018 plan, but management said they built enough flexibility into their forecast to cover that surprise.
Its efficiency program delivered $ 90 million of savings, which only partly offset the nearly $ 200 million drag from
increased commodity costs.
Earlier in the week, we heard from Caterpillar, which said it expects «steel and
other commodity costs to be a headwind all year.»
Its global profit margin was 5.2 percent in the quarter, as higher
commodity costs reduced earnings in North America.
Ford's North American pretax profit fell 9.2 percent to $ 1.94 billion,
with commodity costs accounting for more than the entire decline.
Ford is
expecting commodity costs will be a $ 1.5 billion headwind this year, with about $ 500 million of that coming in the first quarter, Shanks said.
When oil prices spiked in 2011, nearly all of Method's competitors were forced to raise prices to cover
inflated commodity costs.
Profitability of the division, though, was hurt by operating cost inflation, as rising freight and
commodity costs ate into margins.
So, several companies, including Caterpillar (NYSE: CAT), talked about rising
commodity costs like steel and oil and several talked about higher wage costs.
The affect of
falling commodity costs and easing international growth are very likely to be tackled, together with the development of a huge stimulus plan introduced by the bank this yr to revive the region's fragile financial system.
The outlook on milk prices will sound bells for risk assessors at food firms, who track markets for indications of
how commodity costs could impact profit margins.
Dairy commodity costs have surged in the space of just one month to cap off huge rises in the prices being paid out by processors over the last year, according to recently published data by DIN Consultancy.
The FAO's predictions
concerning commodity costs and production show sustained high prices for milk and growing sugar consumption in the developing world.
In a report co-authored with University of Guelph economics professor Ross McKitrick, Mr. Adams concluded, «Solar and wind systems provide just under 4 percent of Ontario's power but account for about 20 percent of the
average commodity cost.»
Further, rapid expansion of biofuel production may have many unintended and undesirable consequences for
agricultural commodity costs, fossil energy use, and environmental degradation.
This accounted for only 3.4 % of Ontario's electricity generating capacity, but represented 20 % of the
total commodity cost of electricity in the province.
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And gas fired generators face
rising commodity costs in coming years as the LNG plants come on stream, and domestic gas prices rise to match export prices.
The increase
in commodity costs was bad timing, but analysts also point to the size of the charge as proof that the company overpaid.
Read through the interview prof.. The part about brands like Relaxo being able to pass of
increasing commodity cost was en lighting... So instead of worrying if the input commodities will go down or up..
Procter & Gamble said, «Higher
commodity costs reduced core earnings per share growth by approximately five percentage points.»
Food makers such as Kraft and Mondelez have reported soft volume as they've boosted the prices of their products to help offset the higher
commodity costs.
Some of the pressures facing the company are beyond its control: higher
commodity costs, fiercer competition, a restaurant industry showing little to no growth, and a strapped lower - income consumer.
The reports looked strong at first, but looking under the hood, Cramer was very concerned by the weakness he saw: Kimberly - Clark, for one, is facing pricing challenges, rising
commodity costs and a slumping diaper business in what had once been its best growth market: China.
noted that its lower EBIT (earning before interest and taxes) was caused by
commodity cost increases (metals) of about $ 480 million.
The company, which is the No. 2 U.S. automaker behind General Motors, was hurt by rising
commodity costs and unfavorable foreign exchange rates in the latest quarter.
In North America, Ford's market share declined by just over 0.5 percent and profit margins declined just over a percentage point to 7.8 percent, which Ford blamed on the higher
commodity costs.
Now, thanks to its planned merger with H.J. Heinz, led by a 3G Capital and Warren Buffett's Berkshire Hathaway (BRK - B), Kraft stands a better chance of taking on overseas markets, getting the clout it needs to rein in rising
commodity costs and attain more efficient operations that will lower its expenses.
Ford expects higher
commodity costs to eat into 2018 profits, offsetting gains from cost - cutting efforts.
While these price increases could help protect the chain's margins, especially as it faces higher labor and
commodity costs, it's also likely that Chipotle will see some pushback from diners, Tarantino said.
* MONDELEZ - QTRLY ADJUSTED GROSS PROFIT MARGIN WAS 39.4 PERCENT, DOWN 110 BASIS POINTS, DRIVEN BY UNFAVORABLE MIX, HIGHER
COMMODITY COSTS & FREIGHT INFLATION Source text for Eikon: Further company coverage:
Cost of goods sold (COGS) per hectoliter decreased 2.5 percent for the year and 2.8 percent for the quarter, driven by supply chain cost savings and lower
commodity costs, partially offset by lower fixed - cost absorption due to lower volumes.
Phrases with «commodity costs»