WESTCHESTER, ILL. — “Rapidly changing raw material markets” combined with foreign exchange impacts to drag down earnings at Ingredion, Inc. in the second quarter of fiscal 2019.

Net income in the second quarter ended June 30 totaled $105 million, equal to $1.57 per share on the common stock, down 8% from $114 million, or $1.59 per share, in the same period a year ago. Net sales decreased 4%, falling to $1,434 million from $1,496 million.

In the six months ended June 30 net income was $205 million, or $3.06 per share, down 19% from $254 million, or $3.52 per share, in the same period a year ago. Net sales decreased 4% to $2,854 million from $2,965 million.

“Our sales teams continue to take aggressive pricing actions and delivered $39 million of favorable price increases in the quarter versus the year ago period,” James P. Zallie, president and chief executive officer, said during an Aug. 1 conference call with analysts. “Operating income from the quarter was down 11% year-over-year, 7 percentage points of which were due to negative foreign exchange translation impacts. … Our North America business has faced a challenging raw material market and is lapping higher co-product values. Additionally, the unresolved U.S.-China trade dispute continued to create crop inventory imbalances, which reduced co-product values. These factors have resulted in a higher net cost of corn. As we navigate these challenges, we remain focused on strategic initiatives to forge growth and drive value creation.

“We’re pleased that specialty ingredients delivered net sales growth in the quarter, led primarily by sugar reduction and specialty sweeteners. In the second half, we will begin allulose production at our manufacturing facility in San Juan del Río, Mexico, which will complement our existing portfolio of specialty sweeteners, enabling us to capitalize on the growing consumer demand for plant-based foods. Our previously announced joint venture with Verdient Foods is progressing well. We are actively filling our customer pipeline for animal nutrition and consumer food products and anticipate incremental sales in the second half of this year.”

Operating income in North America in the second quarter of fiscal 2019 totaled $139 million, down 7% from $150 million a year ago. Sales in the division decreased 3% to $885 million from $916 million.

Mr. Zallie said the decline in North America primarily reflected higher corn costs and lower co-product values. The timing of scheduled plant maintenance at Argo, the company’s largest facility, also played a role in the sluggish results, he said.

Also sustaining a decline in the quarter was Ingredion’s Asia Pacific division, where operating income fell 15% to $23 million. Sales in Asia Pacific also were lower, falling 3% to $195 million from $201 million.

“The region experienced slower economic growth due to the impact of trade disputes and weaker foreign exchange rates, which drove input costs across the region,” Mr. Zallie said.

Operating income in the company’s South America business fell 20% to $16 million from $20 million. Sales decreased 7% to $215 million.

“In South America, net sales were down due to foreign currency weakness, primarily in Argentina and Colombia,” Mr. Zallie explained. “However, we delivered volume and net sales growth in Brazil and took aggressive pricing actions across the region. Operating income was $16 million, down 20% from the year-ago period, driven by significant foreign exchange impacts primarily in Argentina and in Columbia. This was partially offset by low double-digit organic operating income growth in the region, including specialty sales growth.”

In EMEA, operating income was $23 million, down 21% from $29 million in the same period a year ago. Net sales decreased 5% to $139 million.

James D. Gray, chief financial officer, noted during the call that Ingredion expects 2019 adjusted earnings per share in the range of $6.60 to $6.90.

Mr. Gray noted that Ingredion expects net sales and volumes to be flat to slightly down and adjusted operating income to be down versus fiscal 2018.

Ingredion forecast cash from operations in 2018 to be in the range of $610 million to $660 million.

“We expect to invest between $330 million and $360 million in capital expenditures, of which a significant portion supports our specialty growth platforms,” Mr. Gray said.