UPDATE 2-JM Smucker Q4 beats Street on strong Folgers sales

* Q4 adj EPS $1.02 vs est $0.63

* Sales rise 81 pct to $1.07 bln

* Sees 2010 adj EPS $3.65-$3.80

* Expects 2010 sales to rise 20 pct to $4.5 bln

* Shares rise 12 pct (Recasts; adds analyst comments, conference call details, share movement)

By Renju Jose

BANGALORE, June 18 (Reuters) - J.M. Smucker Co SJM.N, known for its peanut-butter and jelly, posted a quarterly profit that handily beat market expectations, helped primarily by strength in its Folgers coffee business, and raised its 2010 profit outlook, sending its shares up 12 percent.

The company said Folgers, which it acquired last November, benefited from lower short-term commodity costs and increased marketing, especially during Easter.

“The combination of promotional programs, the impact of a fully-integrated sales team and the on-air return of a classic Folgers advertisement proved to be a winning formula,” co-Chief Executive Tim Smucker said on a conference call with analysts.

Fourth-quarter sales rose 81 percent to $1.07 billion, with $456.3 million coming from the Folgers business.

“(Smucker) fully integrated their sales effort around Folgers... moved to more of a kind of an everyday low-pricing strategy and those things helped Folgers to gain share in a category which performed well in the quarter,” William Blair analyst Jon Andersen told Reuters by phone.

S&P Equity Research raised its target price on the stock to $55 from $49.

For 2010, the company said it would continue efforts to re-establish focus on the traditional Folgers business, which makes up about 70 percent of the U.S. retail coffee business.

Orrville, Ohio-based Smucker forecast 2010 adjusted earnings of $3.65 to $3.80 a share, compared with its prior view of $3.62 to $3.72 a share.

The company, which expects the Folgers business to contribute an additional $800 million to $850 million to net sales in 2010, forecast net sales to rise 20 percent to about $4.5 billion in the fiscal year.

Analysts on average were expecting the company to earn $3.35 a share, before items, on revenue of $4.64 billion, according to Reuters Estimates.

For the fourth quarter ended April 30, the company earned $94.3 million, or 80 cents a share, compared with $37.1 million, or 67 cents a share, a year earlier. Excluding items, it earned $1.02 a share.

Analysts expected earnings of 63 cents a share, before items, on revenue of $992.2 million.

Shares of the company were trading up 9 percent, or $4.14, at $47.78 Thursday afternoon on the New York Stock Exchange. They touched a high of $48.68 earlier in the session. (Editing by Anne Pallivathuckal)