J.M. Smucker Q2 Profit Rises, Sales Meets View; Updates 2016 Outlook

(RTTNews) - Branded food products maker J.M. Smucker Co. (SJM) reported an 11 percent increase in profit for the second quarter from last year on strong revenue growth and margins. Sales for the quarter matched analysts' expectations. For fiscal 2016, the company raised the low end of its earnings outlook, but lowered its sales guidance.

The Orrville, Ohio-based maker of Smucker's jams and Folgers coffee reported net income for the second quarter of $176.0 million, up 11 percent from $158.3 million in the prior-year quarter, while earnings per share declined to $1.47 from $1.55 last year.

The decline in earnings per share reflects the benefit from Big Heart operations that was offset by merger and integration costs, higher interest expense, and the impact of additional shares outstanding.

Excluding special items, adjusted earnings for the quarter were $1.91 per share, compared to $1.69 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $1.51 per share for the quarter. Analysts' estimate typically excludes one-time items.

Adjusted income, before amortization, for the latest quarter was $1.91 per share, compared to last year's $1.69 per share.

Net sales for the quarter surged 40 percent to $2.08 billion from $1.48 billion in the same quarter last year, and matched analysts' consensus estimate of $2.08 billion.

The strong double-digit sales growth reflected the contribution of Big Heart Pet Brands, acquired in fiscal 2015, and growth within the U.S. Retail Coffee segment.

Net sales, excluding acquisitions and foreign currency exchange, increased 2 percent from last year.

Looking ahead to fiscal 2016, the company forecasts non-GAAP earnings per share of $5.70 to $5.80 and adjusted earnings per share of $6.85 to $6.95 per share. The company also forecast net sales for the year of $7.9 billion.

Earlier, the company forecast adjusted earnings in a range of $5.65 to $5.80 per share, on projected net sales growth of 40 percent to $8 billion.

The Street is currently looking for full-year 2016 earnings of $5.75 per share on revenues of $7.92 billion.