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SJM

J.M. Smucker (SJM) Beats on Q2 Earnings; Revenues In-Line

The J. M. Smucker CompanySJM engages in the manufacture and marketing of branded food products worldwide. The company's primary products include coffee, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to-spread frostings, and canned milk.

Strong organic sales growth, product innovation and constant efforts to expand through acquisitions have remained the company's strong points over the past several quarters. However, the company has been struggling with declining coffee volumes since past few quarters due to increased prices of coffee products, as a result of hike in coffee costs since Jan 2014. But, we note that Smucker had announced a cut in coffee prices in July 2015, which will therefore ease volumes going forward. However, currency impact continues to remain a headwind.

Investors should also note the recent earnings estimate revisions for SJM, as the consensus estimate has been rising slightly over the past 30 days. SJM has a mixed earnings history. SJM has delivered positive surprise in two of the last four quarters, with one in-line and one negative surprise, making for an average positive surprise of 2.47%.

Currently, SJM has a Zacks Rank #3 (Hold), but that could definitely change following Smucker's earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: SJM posted earnings of $1.62 per share, exceeding our consensus of $1.52 per share. Investors should note that these figures take out stock option expenses.

Revenue: SJM posted revenues of $2.077 billion, very much in-line with our consensus estimate.

Key Stats to Note: The acquired Big Heart business contributed $576.7 million to net sales in the second quarter of fiscal 2016. Excluding Big Heart, incremental impact from Sahale acquisitions and currency impact, sales grew 2% in the reported quarter. Also, the company witnessed volume gains in the coffee segment, owing to lower coffee costs and the recently introduced Dunkin' Donuts K-Cup pods.

Stock Price: Inactive in pre-market trading .

Check back later for our full write up on this SJM earnings report later!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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