Earnings Report for J. M. Smucker Co. (SJM)



SLM-june17,2010

June 17, 2010 - J.M. Smucker Co.'s (SJM) fiscal fourth-quarter earnings rose 28% on fewer restructuring charges, as profit smashed analysts' estimates while sales surprisingly edged higher.

The food maker also forecast earnings for the new year of $4.50 to $4.60 a share on sales growth of about 3%. Analysts surveyed by Thomson Reuters expect a profit of $4.42 a share and a 4% sales increase to $4.75 billion.

Smucker--which makes jams, jellies and Jif peanut butter as well as Crisco oils and Pillsbury products--has seen strong results in recent quarters as it has benefited from lower commodity costs and higher margins as well as its 2008 acquisition of the Folgers coffee brand.

Meanwhile, Smucker is in the midst of a three-year restructuring effort which will result in a 15% cut in the work force as it consolidates its coffee production. Some $60 million in annual cost savings are anticipated from the effort.

For the quarter ended April 30, the company reported a profit of $120.6 million, or $1.01 a share, up from $94.3 million, or 80 cents a share, a year earlier. Excluding restructuring costs, earnings rose to $1.07 from $1.02 a share a year earlier as sales eked higher by 0.1% to $1.07 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 80 cents a share on $1.04 billion in sales. Gross margin rose to 40.2% from 37.4% on lower manufacturing and raw-material costs.

Sales at the company's U.S. retail coffee business, its biggest, fell 1.4% on a 4% drop in volume following an "exceptionally strong" prior-year period while profit slid 15% on higher marketing costs. In its U.S. retail consumer market arm, which includes peanut butter and jelly, sales rose 5.2% as profit climbed 20% on lower costs.

Shares closed at $57.75 Wednesday and were inactive premarket. The stock has risen 32% in the past year.

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