The J.M. Smucker Company (SJM, Financial) filed Quarterly Report for the period ended 2010-10-31.
The J.m. Smucker Company has a market cap of $7.8 billion; its shares were traded at around $65.3 with a P/E ratio of 14 and P/S ratio of 1.7. The dividend yield of The J.m. Smucker Company stocks is 2.5%. The J.m. Smucker Company had an annual average earning growth of 9.9% over the past 10 years. GuruFocus rated The J.m. Smucker Company the business predictability rank of 2.5-star.SJM is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, John Hussman of Hussman Economtrics Advisors, Inc., Pioneer Investments, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Jeremy Grantham of GMO LLC, John Keeley of Keeley Fund Management, Manning & Napier Advisors, Inc.
Gross profit increased $2.4 million to 38.7 percent of net sales in the second quarter of 2011, from 38.5 percent in the second quarter of 2010. The second quarter of 2011 includes the impact of $12.1 million of restructuring charges in cost of products sold and $5.9 million of unrealized mark-to-market losses on derivative contracts. The impact of raw material and manufacturing costs on gross profit was mixed. Green coffee costs were significantly higher in the second quarter of 2011, compared to the second quarter of 2010. Pricing actions taken earlier in the year, relative to the recognition of higher green coffee costs, contributed to gross profit in the second quarter of 2011. The Company expects to recognize steadily higher green coffee costs during the remainder of the year. Higher costs were also realized for milk, sugar, and soybean oil while lower costs were recognized for peanuts and flour. The second quarter of 2010 had benefited from volume-related plant efficiencies.
Operating income increased $8.8 million, or four percent, in the second quarter of 2011, compared to 2010, despite an increase in special project costs of approximately $15.0 million. Excluding the impact of special project costs in both periods, operating income increased $23.9 million, or 10 percent, and improved from 18.7 percent of net sales in 2010, to 20.6 percent in 2011.
Operating income increased $5.2 million, or one percent, in the first six months of 2011, compared to 2010, despite an increase in special project costs of approximately $28.8 million. Excluding the impact of special project costs in both periods, operating income increased $33.9 million, or eight percent, and improved from 18.2 percent of net sales in 2010, to 19.7 percent in 2011.
Despite an increase in the average cash and investment balance in 2011, compared to 2010, interest income was essentially flat during the second quarter and decreased $1.1 million during the first six months, due to a lower overall investment yield. Interest expense increased $1.0 million during the second quarter of 2011, compared to 2010, as lower average debt outstanding was more than offset by modestly higher interest rates. Interest expense decreased $1.4 million during the first six months of 2011, compared to 2010, as lower average debt outstanding offset modestly higher interest rates. Debt repayments made during fiscal 2010 totaled $625.0 million and were offset somewhat by the issuance of $400.0 million in Senior Notes on June 15, 2010.
The Company expects to incur restructuring costs of approximately $235.0 million, of which $53.7 million has been incurred through October 31, 2010 including $20.4 million and $48.0 million in the second quarter and first six months of 2011, respectively. The balance of the costs is anticipated to be incurred over the next four fiscal years as the facilities are closed.
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The J.m. Smucker Company has a market cap of $7.8 billion; its shares were traded at around $65.3 with a P/E ratio of 14 and P/S ratio of 1.7. The dividend yield of The J.m. Smucker Company stocks is 2.5%. The J.m. Smucker Company had an annual average earning growth of 9.9% over the past 10 years. GuruFocus rated The J.m. Smucker Company the business predictability rank of 2.5-star.SJM is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, John Hussman of Hussman Economtrics Advisors, Inc., Pioneer Investments, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Jeremy Grantham of GMO LLC, John Keeley of Keeley Fund Management, Manning & Napier Advisors, Inc.
Highlight of Business Operations:
The Companys net income per diluted share was $1.25 and $1.18 for the second quarters of 2011 and 2010, and $2.11 and $2.00 for the first six months of 2011 and 2010, respectively, an increase of six percent in both periods. The Companys income per diluted share, excluding special project costs, was $1.38 and $1.22 for the second quarters of 2011 and 2010, and $2.42 and $2.14 for the first six months of 2011 and 2010, respectively, an increase of 13 percent in both periods, as 2011 periods benefited from operating income improvements and the impact of a lower effective tax rate compared to 2010.Gross profit increased $2.4 million to 38.7 percent of net sales in the second quarter of 2011, from 38.5 percent in the second quarter of 2010. The second quarter of 2011 includes the impact of $12.1 million of restructuring charges in cost of products sold and $5.9 million of unrealized mark-to-market losses on derivative contracts. The impact of raw material and manufacturing costs on gross profit was mixed. Green coffee costs were significantly higher in the second quarter of 2011, compared to the second quarter of 2010. Pricing actions taken earlier in the year, relative to the recognition of higher green coffee costs, contributed to gross profit in the second quarter of 2011. The Company expects to recognize steadily higher green coffee costs during the remainder of the year. Higher costs were also realized for milk, sugar, and soybean oil while lower costs were recognized for peanuts and flour. The second quarter of 2010 had benefited from volume-related plant efficiencies.
Operating income increased $8.8 million, or four percent, in the second quarter of 2011, compared to 2010, despite an increase in special project costs of approximately $15.0 million. Excluding the impact of special project costs in both periods, operating income increased $23.9 million, or 10 percent, and improved from 18.7 percent of net sales in 2010, to 20.6 percent in 2011.
Operating income increased $5.2 million, or one percent, in the first six months of 2011, compared to 2010, despite an increase in special project costs of approximately $28.8 million. Excluding the impact of special project costs in both periods, operating income increased $33.9 million, or eight percent, and improved from 18.2 percent of net sales in 2010, to 19.7 percent in 2011.
Despite an increase in the average cash and investment balance in 2011, compared to 2010, interest income was essentially flat during the second quarter and decreased $1.1 million during the first six months, due to a lower overall investment yield. Interest expense increased $1.0 million during the second quarter of 2011, compared to 2010, as lower average debt outstanding was more than offset by modestly higher interest rates. Interest expense decreased $1.4 million during the first six months of 2011, compared to 2010, as lower average debt outstanding offset modestly higher interest rates. Debt repayments made during fiscal 2010 totaled $625.0 million and were offset somewhat by the issuance of $400.0 million in Senior Notes on June 15, 2010.
The Company expects to incur restructuring costs of approximately $235.0 million, of which $53.7 million has been incurred through October 31, 2010 including $20.4 million and $48.0 million in the second quarter and first six months of 2011, respectively. The balance of the costs is anticipated to be incurred over the next four fiscal years as the facilities are closed.
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