J. M. Smucker (SJM) Tops Q3 EPS by 3c

J. M. Smucker (NYSE: SJM) reported Q3 EPS of $1.54, $0.03 better than the analyst estimate of $1.51. Revenue for the quarter came in at $1.44 billion versus the consensus estimate of $1.47 billion.

Outlook The Company stated that due to its pending acquisition of Big Heart Pet Brands, which is expected to close in the fourth quarter of the current fiscal year, it is not providing a formal update to its full year earnings per share and free cash flow guidance. However, the Company is providing selective forward-looking information related to its fourth quarter and a general overview of full year earnings. The Company expects to provide its outlook for fiscal 2016, including the impact of Big Heart Pet Brands, as part of its fourth quarter earnings release, planned for June 2015.

During the fourth quarter, the Company anticipates a modest decrease in net sales compared to the same period last year before any impact of Big Heart Pet Brands. This outlook reflects a softer volume expectation in its U.S. Retail Coffee segment than previously anticipated. Net sales expectations for the Company's two other segments have not changed significantly from the outlook provided in November 2014. Based on these fourth quarter estimates, the Company expects to realize a decrease in full fiscal year net sales of nearly 3 percent as compared to the prior year.

Excluding any impact from the Big Heart Pet Brands acquisition, the Company stated that fourth quarter earnings per diluted share are expected to result in full year earnings per share below the midpoint of its previous guidance range of $5.45 to $5.65 by approximately 3 percent. With the impact of anticipated lower coffee volume, the Company now expects full year U.S. Retail Coffee segment profit to decrease by approximately 15 percent, as compared to the prior year. In addition, the impact of the further weakening of the Canadian dollar in the back half of the fiscal year, and deal and employee-related expenses incurred in the third quarter were not reflected in the previous guidance range.

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