Shrinking Commodity Costs Fuel Smucker's 4Q Beat

J.M. Smucker (NYSE:SJM) beat the Street on Thursday with a 25% leap in fiscal fourth-quarter earnings as the parent of Folgers coffee and Jif peanut butter capitalized on shrinking commodity costs.

The company said it earned $130.3 million, or $1.22 a share, last quarter, compared with a profit of $104.1 million, or 93 cents a share, a year earlier.

Excluding one-time items, it earned $1.29 a share, up from $1.10 a share the year before and well above expectations for $1.16.

However, Smucker said its sales dipped 1.2% to $1.34 billion, matching the Street’s view. Overall volumes were up 2% thanks to a 6% jump in U.S. retail coffee and a 4% rise in domestic retail consumer foods.

Boosted by a 4.7% decline in input costs, gross margins grew to 35.8% from 33.2%.

“Our momentum continued through a strong fourth quarter, as we achieved record sales, earnings, and operating cash flow for the full fiscal year," CEO Richard Smucker said in a statement.

Looking ahead, Smucker forecasted non-GAAP EPS of $5.65 to $5.75 for fiscal 2014. The midpoint of that new range, $5.70, would narrowly trail consensus calls from analysts for $5.73.

Net sales are seen comparable with fiscal 2013, while management forecasted free cash flow of about $600 million.

Shares of Orrville, Ohio-based company were inactive in premarket trading but have rallied almost 19% so far this year.