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Ingredion investors are bitter after low sweetener volume sours ingredients maker's earnings

Shares of the ingredients company slumped following a slashed forecast and cost-saving measures
Sugar cubes
As part of its cost saving strategy, its California facility will cease wet-milling operations

Ingredion Incorporated (NYSE:INGR) shares slumped in early Friday trading after the ingredients manufacturer cuts its forecast and announced a cost-savings program.

In its preliminary second-quarter results, the company expects earnings to be between US$1.63 to US$1.68, below the consensus estimate of US$1.92.

For the full year, the company lowered its forecast to US$7.50 to US$7.80 compared with previous guidance of US$7.90 to US$8.20. Consensus estimates called for US$7.92.

Adjusted cash flow from operations is expected to be between US$800mln and US$850mln.

Shares of the ingredients company fell nearly 10% in pre-market trading and continued to fall 7% to US$102.86 in Friday morning trading.

The company attributed the disappointing preliminary earnings to lower-than-expected sweetener volumes sold into beverage in North America, as well as higher-than-expected manufacturing costs.

As part of its cost-saving strategy, its California facility will stop wet-milling operations. Wet-milling is the process in which feed material, like corn, is softened in water to separate its components.

The Illinois-based company provides ingredients found in foods, beverages, personal care items, pharmaceuticals and other products.

A distribution station is expected to be set up by the end of the year to distribute to the western US.

"Establishing firm Cost Smart targets will ensure the most effective use of our resources to better navigate future cost pressures and ensure long-term shareholder value creation," said CFO Jim Gray in a press release.

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