(Recasts, adds analysts' views, updates shares)
By Devika Krishna Kumar
June 5 J.M. Smucker Co forecast
full-year profit above estimates as sales increased in its
domestic consumer food business - which includes peanut butter
and cooking oils - and despite rising coffee costs.
The company's coffee business, which includes the Folgers
and Dunkin Donuts brands, is its largest by revenue.
Smucker, the biggest U.S. roaster, was forced to cut prices
of packaged coffee earlier this year when arabica coffee prices
But arabica prices have jumped nearly 90 percent in three
months, allowing Smucker to raise list prices for the first time
since 2011 on most of its U.S. packaged coffee.
The company, which also makes Jif peanut butter and Crisco
oils, forecast full-year adjusted earnings of $5.95-$6.05 per
share. It expects sales to rise about 5 percent, implying
revenue of about $5.9 billion.
Analysts on average were expecting earnings of $5.98 on
revenue of $5.77 billion, according to Thomson Reuters I/B/E/S.
Profit in the company's domestic consumer food business
rose 6 percent to $95.7 million in the fourth quarter ended
April 30, the company said on Thursday.
Smucker said it expects its peanut-butter business to be the
key contributor to earnings in its consumer foods business in
2015 as it enters into new contracts at lower prices.
The company failed to benefit from a drop in peanut prices
last year as it had signed long-term peanut purchase contracts
unlike rivals such as Hormel Foods Corp, the owner of
Skippy peanut butter.
Smucker has been struggling to boost sales of its peanut
butter and fruit spreads due to rising competition and consumers
shifting away from artificially sweetened fruit spreads.
Ohio-based Smucker said it expects its K-cups - coffee pods
used in Keurig Green Mountain Inc's single coffee
brewers - to achieve modest volume growth in 2015.
The company's net income fell 9 percent to $118.5 million,
or $1.16 per share, in the fourth quarter.
Excluding items, profit was $1.21 per share.
Net sales fell 8 percent to $1.23 billion, hurt by a 12
percent drop in sales in its U.S. retail coffee business as it
cut prices to pass on lower green coffee costs realized during
Analysts on average had expected Smucker to earn $1.16 per
share on sales of $1.24 billion.
Smucker shares were up 1.5 percent at $104.44 in afternoon
trading on the New York Stock Exchange on Thursday.
(Reporting by Siddharth Cavale and Devika Krishna Kumar in
Bangalore; Editing by Joyjeet Das)