DOW JONES NEWSWIRES J.M. Smucker Co.'s (SJM) fiscal fourth-quarter earnings fell 21%, but beat analysts' estimates, as the company's price increases couldn't fully offset rising commodity costs. The company also forecast full-year earnings between $5 and $5.15 a share on a 20% sales increase, though it expects the cost of products sold to increase about 25%, driven primarily by significantly higher commodity costs. Analysts surveyed by Thomson Reuters currently expect $5.12 on sales of $5.16 billion. "As we begin the new fiscal year, we remain focused on building our brands while navigating through this period of commodity cost volatility," said Richard Smucker, executive chairman and co-chief executive. The food company's earnings slipped in the previous quarter as well, ending a trend of rising earnings and improved margins due to higher raw-materials costs and an increasingly more promotional environment. Smucker--known for its namesake jams and jellies, Jif peanut butter and Pillsbury products--gets most of its revenue from U.S. retail coffee. Last month, the company paid $360 million to buy Rowland Coffee Roasters Inc., seller of the Hispanic Cafe Bustelo and Cafe Pilon brands, and also increased the list price for most of its coffee products by an average 11%, its fourth rise in about a year. Kraft Foods Inc. (KFT), the maker of Maxwell House coffee, said last month its first-quarter earnings declined 58%, absent a prior-year gain. Although revenue grew 11% and margins improved, the rival company lowered its full-year revenue forecast. For the quarter ended April 30, Smucker reported a profit of $94.9 million, or 82 cents a share, down from $120.6 million, or $1.01, a year earlier. Excluding items such as restructuring, merger and integration costs, per-share earnings fell to $1 from $1.07. Sales jumped 11% to $1.19 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of 99 cents on revenue of $1.17 billion. Gross margin fell to 35.5% from 40.2%, reflecting higher raw-material and freight costs. U.S. retail coffee sales, including such brands as Folgers, Dunkin' Donuts and Millstone, rose 21% and its profit increased 8%. Smucker's retail consumer segment sales dropped 2% and profit declined 7%, due in part to a peanut-butter price reduction. The company's oils and baking segment saw an 11% sales growth as income grew 3%. Shares closed at $76.39 Wednesday and were inactive premarket. The stock has risen 38% over the past year. -By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
