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J.M. Smucker Beats Consensus Earnings Per Share Estimate by 8.2%

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Good reported earnings in 1Q16

EPS (earnings per share) represents the portion of a company’s profit allocated to each outstanding share of common stock. For 1Q16, J.M. Smucker (SJM) posted EPS of $1.32 on revenue of $1.95 billion. The earnings reflected its recent acquisition of the Big Heart Pet Brands and its launch of Dunkin’ Donuts K-Cup pods this quarter. The company reported a 35% increase in EPS compared to 4Q15.

Over the next five years, the analysts that follow this company are expecting earnings to grow at an average annual rate of 8.35%. This year, analysts are forecasting earnings to rise 6.86% compared to last year. They expect earnings growth next year of 10.05% over this year’s earnings forecast.

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Dividend paid

J.M. Smucker approved an increase in the quarterly dividend from $0.64 to $0.67 per common share, an increase of 5%. The dividend was paid on Tuesday, September 1, 2015, to shareholders of record at the close of business on Friday, August 14, 2015.

Key results summary

Here are some key results of J.M. Smucker’s 1Q16 earnings release:

  • Net sales increased $628.2 million, or 47%, reflecting the contribution of Big Heart Pet Brands acquired in fiscal 2015 and the retail launch of Dunkin’ Donuts K-Cup pods during the quarter.
  • Net income per diluted share was in line with the prior year, as higher interest expense balanced the benefit from Big Heart operations and the impact of additional shares outstanding.
  • Reported non-GAAP (generally accepted accounting principles) income per diluted share was $1.32, a 1% decrease.
  • Adjusted non-GAAP income per diluted share, which excludes amortization, was recorded at $1.60, a 7% increase.
  • The company maintained its fiscal 2016 earnings outlook with non-GAAP income per diluted share expected in the range of $5.65–$5.80.
  • The earnings outlook for adjusted non-GAAP income per diluted share is expected to range from $6.80–$6.95.
  • The company reconfirmed its synergy target related to the Big Heart acquisition of $200 million by the end of fiscal 2018.

Peer performance

J.M. Smucker’s (SJM) main competitors, ConAgra Foods (CAG), General Mills (GIS), and Mondelez International (MDLZ), recorded EPS of $0.59, $0.75, and $0.47, respectively, for their last reported quarters. The SPDR S&P 500 ETF (SPY) invests 0.08% of its portfolio in ConAgra Foods.

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