J.M. Smucker Q4 Profit Declines, Adj. Earnings Top Estimates

(RTTNews) - Branded food products maker J.M. Smucker Co. (SJM) Thursday reported lower fourth-quarter profit, as sales decreased 8 percent reflecting reduction in net price realization. Sales declined in all of its segments. Adjusted earnings, however, topped analysts' expectations, while revenues came in slightly below view.

For the fourth quarter ended April 30, the company posted net income of $118.5 million or $1.16 per share, lower than $130.3 million or $1.22 per share in the previous year.

Excluding special project costs, earnings were $1.21 per share, while it was $1.29 per share in the prior-year quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $1.16 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 8 percent to $1.23 billion from $1.34 billion a year ago. Wall Street expected revenues of $1.24 billion.

The company attributed the sales decline mainly to an 8 percent reduction in net price realization largely due to retail and Foodservice coffee.

Net sales from U.S. Retail Coffee declined 12 percent, U.S. Retail Consumer Foods sales were down 4 percent, and net sales from International, Foodservice, and Natural Foods showed a decrease of 7 percent from last year.

Operating margin was 15.5 percent, compared with 16.0 percent a year ago.

U.S. Retail volume improved 1 percent in Coffee and was up 3 percent in Consumer Foods. In International, Foodservice, and Natural Foods, volume decreased 3 percent, excluding the impact of Enray and Cumberland.

The company said its recent-quarter results included operations of Enray Inc., since completion of the acquisition on August 20, 2013, and the impact of the company's licensing and distribution agreement with Cumberland Packing Corp., which commenced on July 1, 2013.

Looking ahead, for fiscal 2015, the company expects non-GAAP income per share to be in the range of $5.95 to $6.05, which excludes certain non-comparable items of $0.15 per share.

Net sales for the year are expected to increase about 5 percent compared to 2014, reflecting the U.S. Retail Coffee price increase announced this week. For fiscal 2014, the company reported net sales of $5.61 billion.

Street currently is looking for fiscal year 2015 earnings of $5.98 per share, on revenues of $5.77 billion.

On Tuesday the had firm increased the list price for the majority of its packaged coffee products sold in the U.S., primarily under the Folgers and Dunkin' Donuts brand names. Prices were raised an average of nine percent on impacted items in response to sustained increases in green coffee costs.

SJM closed Wednesday's regular trading at $102.83, down 0.11 percent.