Earnings Preview: J.M. Smucker Co.

posted: 83 DAYS 5 HOURS AGO

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PORTLAND, Ore. -J.M. Smucker Co. reports earnings for its fiscal second quarter on Friday before the market opens. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Smucker — the nation's top maker of jams and jellies as well as the producer of Jif peanut butter — has benefited during the economic downturn as consumers eat at home and focus on the most basic of items.

The company, based in Orrville, Ohio, has also seen tremendous growth thanks to its nearly $3 billion acquisition of Folgers coffee last year.

Smucker has seen sales in its consumer retail division — a unit that sells grocery store mainstays — rise as consumers cook more. But, shoppers are buying fewer of some of the company's convenience products such as pre-made, frozen crustless peanut butter and jelly sandwiches, called Uncrustables.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect the company to earn $1.04 cents per share on revenue of $1.24 billion for the quarter. The estimates typically exclude one-time items.

ANALYST TAKE: Deutsche Bank analyst Eric Katzman reiterated a "Buy" rating on Smucker shares, on expected strong growth from Folgers and the belief that most of its other products are gaining share.

He said consumers are responding well to the company's trusted brands for relatively low cost. But he will be keeping an eye on Smucker's costs for promotions in near future

WHAT'S AHEAD: Commodity prices may be down now, but are prone to fluctuations and remain an ongoing concern for the company.

STOCK PERFORMANCE: Shares of Smucker rose more than 6 percent during the quarter and more than 38 percent in the past 52 weeks.

2009-11-18 15:06:39