J.M. Smucker Co.'s acquisition of Folgers Coffee Co. continues to pay off for the jam maker, helping to more than double its fiscal second-quarter profit, as consumers continue to turn to the company's well-known brands and eat at home more during the recession.
The nation's top maker of jams and jellies and Jif peanut butter also raised its 2010 profit guidance on Friday, based on its strong performance during the first half of the year.
Smucker purchased Folgers last year, a move that has paid off handsomely. It has also benefited from consumers eating at home more often during the economic downturn, which has led many shoppers to focus on basic food items like those that Smucker makes.
"Consumers continue to respond well to our brands, our product innovations, and the value we bring in helping to provide memorable meals and moments for their families," Chairman and Co-CEO Tim Smucker said in a statement.
The company based in Orrville, Ohio earned $140 million, or $1.18 per share, for the period ended Oct. 31. That's up sharply from $51.5 million, or 94 cents per share, a year earlier.
Taking out merger and integration costs related to Folgers, profit was $1.22 per share.
Revenue improved to $1.28 billion from $843.1 million, helped by domestic retail coffee sales totaling $445.1 million. Domestic retail coffee sales results include Folgers as well as Dunkin' Donuts coffee.
In a sign of just how much Folgers has helped Smucker's results, the company said revenue was down 6 percent for the quarter when removing Folgers and the impact of foreign currency translation.
The performance topped the expectations of analysts polled by Thomson Reuters, who forecast a profit of $1.04 per share on sales of $1.24 billion.
Smucker boosted its 2010 earnings outlook to a range of $3.95 to $4.05 per share, which excludes 17 cents to 19 cents per share for merger and integration costs related to Folgers. Its prior forecast was for a profit of $3.65 to $3.80 per share. The company anticipates annual sales of about $4.5 billion.
Analysts predict earnings of $3.83 per share on revenue of $4.55 billion for the year.