Market Report -- Story Stocks (SJM)

November 20, 2009 9:25 AM ET

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J. M. Smucker

J. M. Smucker (SJM 53.48) reported much better-than-expected earnings for its fiscal second quarter, led by solid sales from the Folgers coffee brand, which was acquired a year ago.

Smucker reported fiscal second quarter earnings of $1.18 per share, excluding $0.04 of amortization. The results were $0.14 better than the First Call consensus of $1.04.

Revenues rose 51.7% year-over-year to $1.28 billion, slightly ahead of the $1.24 billion consensus. The addition of Folgers accounted for the year-over-year improvement. Excluding Folgers and foreign exchange, net sales were down 6% from the prior year. Smucker said volume was up 1%, more than offset by a 7% decline due to price and mix, with price reductions in the U.S. retail oils and baking segment the key driver.

"With strong momentum in the first half of the year, and confidence in our strategy and our ability to execute this strategy, we are raising our outlook for the year," said co-CEO Richard Smucker. The company now expects full year earnings of $3.95 to $4.05 per share, up from the previous range of $3.65 to $3.80 and ahead of the current consensus estimate of $3.83.

Smucker reaffirmed its full year revenue forecast of $4.5 billion; the consensus stands at $4.55 billion.

Shares of SJM are 23.3% higher year-to-date and have only slightly outperformed the S&P 500, which is up 21.2% year-to-date.

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