UPDATE 2-Smucker Q4 results lag Street; shares fall
(Recasts; adds details, share movement)
June 19 (Reuters) - Peanut butter and jelly maker J.M. Smucker Co (SJM.N: Cotización) posted quarterly results that trailed market estimates as price increases failed to counter higher commodity and other costs, sending its shares down 11 percent.
Smucker, known for its namesake jellies and jams, has raised prices of its products over the last several months as it grapples with rising commodity costs, but has been unable to maintain profit margins.
The company, which also makes Jif peanut butter and Crisco shortening brands, said it expects raw material costs in 2009 to rise about $150 million over 2008 levels, spurred by higher prices for soybean oil, wheat, peanuts and certain fruits.
The product price increases will help offset the impact of the higher raw material costs, but will not be sufficient to expand margins in the near term, the company said.
For the fourth quarter, Smucker reported net income of $37.1 million, or 67 cents a share, compared with $42.5 million, or 75 cents a share, a year earlier.
Excluding restructuring and merger and integration costs, the company earned 73 cents a share. Gross profit margin fell to 30.9 percent of net sales from 36.5 percent a year earlier.
Net sales rose 20 percent to $590 million for the quarter ended April 30, boosted by its acquisitions of dairy company Eagle Family Foods Holdings Inc, Canadian Carnation canned milk business and Europe's Best Inc, which contributed about 60 percent of the rise.
The company said gross margin at Eagle Family was lower than average partly due to soaring milk costs. Continuación...