DOW JONES NEWSWIRES
J.M. Smucker Co.'s (SJM) fiscal second-quarter earnings soared
amid the addition of the Folgers coffee brand, while lower
commodities prices boosted margins at its other businesses.
Thanks to strong first-half momentum and the quarter's results
handily topping analysts' expectations, the company boosted its
earnings outlook to $3.95 to $4.05 a share, compared with its
August view for earnings at the higher end of its prior estimate of
$3.65 to $3.80. Smuckers again affirmed its revenue target.
Smucker--which makes jams, jellies and Jif peanut butter, as
well as Crisco oils and Pillsbury flour--has bought a series of
food and consumer brands, many of which were shed by larger
competitors. It acquired Folgers from Procter & Gamble Co. (PG)
a year ago for $2.65 billion.
Family-run Smucker derives 75% of its sales from brands that
rank No. 1 in their respective fields. The company has reduced
prices on baking products and food-service demand has been
soft.
For the quarter ended Oct. 31, Smucker reported a profit of $140
million, or $1.18 a share, up from $51.5 million, or 94 cents a
share, a year earlier. Shares outstanding more than doubled because
of stock issued in the Folgers deal. Excluding items such as
restructuring and merger-related costs, earnings rose to $1.22 from
$1.01.
Revenue climbed 52% to $1.28 billion. However, excluding the
impact of acquisitions and currency changes, revenue fell 6%.
Analysts polled by Thomson Reuters most recently forecast
earnings of $1.04 on revenue of $1.24 billion.
Gross margin jumped to 38.5% from 28.9%, with Folgers
contributing the vast majority of the increase.
Volume excluding Folgers rose 1%, but was more than offset price
cuts, mostly in the U.S. retail oils and baking segment.
At its U.S. retail business, net sales fell 4% amid flat volume
as gains in its Jif peanut butter and Hungry Jack pancake mixes and
syrups were offset by declines in potatoes, fruit spreads and
Smucker's Uncrustables sandwiches. Profit was up 4%.
Shares closed Thursday at $53.48 and didn't trade premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com;