Third-quarter profits surged for US jam, jelly and peanut butter maker JM Smucker, boosted by the acquisition of the Folgers coffee business and despite higher restructuring costs.
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For the quarter ended 31 January, net income increased 84% to reach US$77.9m, JM Smucker said today (25 February).
However, the company cut its 2009 outlook on expected weak peanut butter sales and increased costs.
JM Smucker has not had any links with the peanut butter salmonella scandal in the US but the company said last week the outbreak would continue to affect peanut butter sales in the country for another two months.
Net sales increased 78% in the third quarter to reach $1.18bn from $665.4m in the previous year.
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By GlobalDataAcquisitions contributed around $491.7m, including $468.5m from Folgers, while foreign exchange reduced net sales by around $16.0m.
Operating income increased 97% to reach $135.5m compared to the third quarter of 2008 and improved from 10.3% to 11.5% of net sales.
For the nine-month period, net income was up 29% to $171.7m, while net sales reached $2.69bn – a 39% increase on the previous year. Operating income increased 32% to reach $293.6m.
“We delivered strong financial performance this quarter with solid results in our core Smucker business and the addition of Folgers,” said Richard Smucker, executive chairman and co-CEO.
“The Folgers merger was completed early in the quarter and contributed to margin expansion and significantly increased cash flow. The integration remains on track and we appreciate the commitment of our employees both in integrating Folgers, and maintaining their focus on the core business.”
The company lowered its sales estimated for fiscal 2009 to $3.6bn to $3.7bn from a previous projection of $3.8bn to $4bn. Profit excluding restructuring and merger related costs for fiscal 2009 is estimated to be between $3.15 and $3.30 a share.
