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J.M. Smucker (SJM) 2Q Earnings In Line With Estimates, Updates Forecast

 November 16, 2012 07:48 AM

(By Balaseshan) J.M. Smucker Co. (NYSE: SJM) reported a 17 percent growth in quarterly earnings on acquisitions of Sara Lee foodservice business and favorable sales mix. Results came in line with consensus, and the maker of branded food products raised full year outlook.

On a non-GAAP basis, earnings per share (EPS) increased 12 percent to $1.45 from $1.29, in-line with Wall Street projections for the second quarter. Net earnings grew 17 percent to $148.8 million.

Net sales increased 7.6 percent to $1.629 billion, in-line with market expectation. Sales, adjusted for non-comparable impact of acquisition, divestiture, and foreign exchange, rose 2 percent to $1.54 billion.

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Overall volume, excluding acquisitions, decreased 2 percent, while overall net price realization was slightly lower as price declines on coffee offset increases taken on peanut butter over the past year.

Gross margin, excluding special project costs, shrank to 33.4 percent from 33.8 percent due to slightly lower commodity costs. Operating margin rose to 16.1 percent from 16.0 percent for the three months ended October 31.

Segment wise, net sales of U.S. Retail Coffee rose 1 percent, U.S. Retail Consumer Foods went up 1 percent, and International, Foodservice, and Natural Foods jumped 38 percent.

Looking ahead for the full year 2013, the Orrville, Ohio-based company raised non-GAAP EPS, excluding special project costs, outlook to range of $5.12 to $5.22 from previous estimate of $5.00 to $5.10, while analysts expect $5.19.

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The company still anticipates sales to increase about 7 percent , including an incremental eight-month contribution from the Sara Lee foodservice business, while Street predicts 7.70 percent growth.

SJM closed Thursday's regular session down 0.37 percent at $85.38. The stock has been trading between $70.50 and $87.81 for the past 52 weeks.



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