Smucker profits beat expectations

August 22, 2009 at 12:00a.m.

CHICAGO (AP) — J.M. Smucker Co. said Friday its fiscal first-quarter profit more than doubled and beat expectations, mostly because of increased sales from last year’s acquisition of Folgers coffee.

The maker of jams, jellies and Jif peanut butter also backed its yearly outlook and said it expects profits at the higher end of its forecast.

The company said sales in its consumer retail division — a unit that sells grocery store mainstays — rose 6 percent, thanks to stronger sales of of Jif peanut butter, jam, jelly and Hungry Jack pancakes.

But as consumers embraced cooking and even the traditional do-it-yourself sandwiches, they also bought fewer Uncrustables, pre-made frozen, crustless peanut butter and jelly sandwiches.

“We’re off to a strong start this year,” Executive Chairman and Co-CEO Tim Smucker said in a statement.

Smucker said it earned $98.1 million, or 83 cents per share, in the three months that ended July 31. That’s up from $42.3 million, or 77 cents per share, during the same period last year.

Excluding one-time costs that amounted to 9 cents per share, the company earned 92 cents per share — well above Wall Street estimates.

Revenue soared 58 percent to $1.05 billion, up from $663.7 million last year. Most of that gain came the Folgers coffee business, which the Orrville, Ohio-based food maker purchased from Procter & Gamble Co. last year in a $3 billion deal.

Analysts surveyed by Thomson Reuters expected Smucker to earn 80 cents a share on revenue of $1.04 billion.

Meanwhile, even though consumers bought more baking products, flour and Crisco oil during the period, sales in that unit dipped 2 percent because of price cuts and discounts.

Merger and integration costs rose sharply to $16.5 million from $3.4 million a year ago because of the Folgers deal.

Also Friday, Smucker said it continues to expect a full-year profit between $3.65 and $3.80 per share. That estimate excludes merger and integration costs that are expected to be between 17 cents and 19 cents per share. Analysts expect the company to earn $3.76 per share for the year.

Last year, the company earned $266 million, or $3.12 per share.

Smucker forecast revenue around $4.5 billion. Analysts predict $4.55 billion.

Shares of the company rose $2.15, or 4.1 percent, to $54.03 in morning trading Friday.