If it is spices, flavors, and seasonings you want, know that McCormick (NYSE:MKC) is the global leader and be done with it. But if you're looking to invest in a spice company, read on.

Earlier this month, the company cut earnings guidance for 2005 by $0.08 a share because of Hurricane Katrina and soft demand in the company's industrial segment, which includes food processors, restaurants, and warehouse clubs such as Motley Fool Stock Advisor recommendation Costco (NASDAQ:COST).

Third-quarter results were posted today, and they're either nice and spicy, or bland as cold porridge, depending on your point of view.

Good and spicy
At $0.35 a share, earnings beat analyst estimates by one penny. That was a $0.02 increase from the comparable quarter a year ago.

The future looks bright as the company's painful vanilla bean hedge winds down and the company implements cost-cutting programs that will result, after three years, in savings of $30 million to $45 million annually. The company must like its prospects, too, because it has spent $141 million to repurchase shares in fiscal year 2005.

The share price is up 3.1% in late afternoon, and the stock has risen nearly 11% from the 52-week low it set following the earnings guidance reduction. Life is good and spicy!

While earnings exceeded expectations, sales didn't. Analysts expected $628.1 million, but actual sales were $622.7 million -- revenue came up roughly even with the comparable period's results, which delivered $613 million.

While the company is working to reduce costs, that will come after pre-tax charges of $100 million to $130 million over the next three years. That may explain why analysts expect the company to compound earnings at 9.8% annually over the next five years -- down from the 11.1% the company achieved over the past five years.

Where's the spice?
If you look at the company's stock price, you see a nice steady rise from 2000 to the end of 2004 -- reflecting the company's superior performance after the company focused on cost and performance improvements starting in 1999. The rise was a very rewarding three-bagger.

The company is again starting a program to improve operating performance. But the stock's PEG ratio is 2.0 (meaning the stocks price-to-earnings is twice its earnings growth rate). I'd call that rich, but in the past investors have shown a willingness to pay a premium to get the safety they see in food-related companies. Still, at 18.3 times 2006 estimated earnings, the company sells for a significant premium to 14.8 times the 2006 projected earnings that competitor International Flavors and Fragrances (NYSE:IFF) garners.

It bears mentioning that McCormick is a commodity company with earnings and revenue stream vulnerable to crop risks, hedging uncertainties, and broader macroeconomic factors. Investors buying these shares should consider these added risks before seeing a spicy investment opportunity, seeking to time their investment decision accordingly.

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Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. Click here to see The Motley Fool's disclosure policy.