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J.M. Smucker (SJM) 3Q Earnings Jump 32 Pct, Beat Estimates

 February 15, 2013 08:50 AM
 


(By Balaseshan) J.M. Smucker Co. (NYSE: SJM), a maker of branded food products, reported a 32 percent jump in quarterly earnings on favorable mix, lower commodity costs, and a decrease in special project costs. Results exceeded Street's expectations.

On a non-GAAP basis, earnings per share (EPS) increased to $1.47 from $1.22, beating Wall Street projections of $1.39 for the third quarter. Net earnings climbed 32 percent to $154.17 million.

Net sales rose 6 percent to $1.56 billion, versus expectations of a 5.70 percent growth, boosted by acquisitions of Sara Lee foodservice business and favorable sales mix. Overall volume, excluding acquisitions, shrank 1 percent.

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Gross margin, excluding special project costs, gained to 34.5 percent from 32.6 percent due to lower commodity costs. Operating margin increased to 17.1 percent from 15.9 percent for the three months ended January 31.

Segment wise, net sales of U.S. Retail Coffee declined 2 percent, U.S. Retail Consumer Foods went up 4 percent, and International, Foodservice, and Natural Foods jumped 28 percent.

Looking ahead for the full-year 2013, the Orrville, Ohio-based company narrowed its non-GAAP EPS guidance to range of $5.17 to $5.22 from previous estimate of $5.12 to $5.22. SJM expects net sales to increase over 6 percent, including an incremental eight-month contribution from the Sara Lee foodservice business. Street predicts EPS of $5.22 on revenue growth of 7.40 percent.

The stock closed Thursday's regular session up 2.03 percent at $92.15. Shares have been trading in the 52-week range of $70.50 to $92.66.

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