Background - If you have milk in your coffee then you have...

Background - If you have milk in your coffee then you have possibly noticed that milk prices have gone up... over 40% driven by the consumption shift in growing economies - appears that as the urbanisation occurs the consumption of traditioal western foods increases and dairy products are one of these......Also Australian milk supplies have decreased as a result of the drought...

WCB is a major beneficiary of this - here is an earnings summary........Note that the 1st half of the year's earnings are well up (almost double) the same period last year.



Earnings per share summary

Period Ending
1st Half 2nd Half Full Year

2008-06-30 51.5 ? ?
2007-06-30 24.6 0.1 24.7
2006-06-30 36.2 -16.6 19.6
2005-06-30 41.5 -22.0 19.5

The company has not issued any profit guidance todate on how the second half has gone ..... but if it only achieves last year' then it will be well up for the year. IMHO it should achieve above this.Dairy prices have held and so long as production is at around last year's the end of year profit should be very nice. If it comes in at 25 cents then the year's earnings will be +75 cents and this puts the stock on a PE of less than 6.

It also has a smart foods joint venture with a dutch company and is looking at another merger.

So it appears to have a few things in its favour at the moment. If the profit increase does eventuate then the upside to the SP could be rewarding.