Smucker Shares Fall on Earnings Miss
Shares of Orrville, Ohio.-based J.M. Smucker led the market down today, falling 6.5% in Wednesday trading after reporting earnings that missed analyst estimates badly.
Sales of $1.56 billion in the fiscal second quarter 2014 declined 4% year over year, and fell short of the $1.61 billion that analysts had anticipated. GAAP earnings of $1.46 per diluted share were up 7% year over year yet still fell short of the consensus estimate of $1.60.
Smucker noted that "pricing actions" and a planned exit from "certain portions of the Company's business in its International, Foodservice, and Natural Foods segment" lay behind the revenue decline. Nevertheless, earnings increased as Smucker improved its operating profit margin by nearly one full percentage point, and concentrated its improved earnings among fewer shares outstanding -- a consequence of share buybacks undertaken over the course of the past year.
Looking forward, CEO Richard Smucker noted that despite an uncertain economy, U.S. shoppers are showing "resilience." Volume sales of the company's products have remained "solid," encouraging Smucker to stand (mostly) behind its previously stated guidance. Smucker anticipates that this current fiscal year, now more than half over, will end with net sales declining 2% in comparison with fiscal 2013. The company previously foresaw only a 1% decline in sales. Non-GAAP earnings are still expected to come in between $5.72 and $5.82 per share. Inclusive of the effects of certain "special project costs," management is predicting earnings of $5.52 to $5.62.
The article Smucker Shares Fall on Earnings Miss originally appeared on Fool.com.
Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
