The J. M. Smucker Company Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended January 31, 2017; Provides Earnings and Impairment Guidance for the Year Ending April 30, 2017; Reports Impairment Charges for the Third Quarter Ended January 31, 2017
February 17, 2017 at 06:58 am EST
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The J. M. Smucker Company reported unaudited consolidated earnings results for the third quarter and nine months ended January 31, 2017. For the quarter, the company's net sales were $1,878.8 million compared to $1,973.9 million a year ago. Operating income was $237.7 million against $318.3 million a year ago. Income before income taxes was $197.6 million against $275.3 million a year ago. Net income was $134.6 million against $185.3 million a year ago. Net cash provided by operating activities was $419.5 million against $542.3 million a year ago. Additions to property, plant, and equipment were $52.6 million against $43.4 million a year ago. Adjusted operating income was $382.8 million against $408.3 million a year ago. Adjusted income before income taxes was $342.7 million against $365.3 million a year ago. Adjusted income was $232.8 million against $246.0 million a year ago. Earnings before interest, taxes, depreciation, and amortization(EBITDA) as $417.9 million against $426.2 million a year ago. GAAP earnings per share were $1.16, a decline from $1.55 in the prior year, driven by the impairment charge. Excluding this charge and reflecting other non-GAAP adjustment for unallocated derivative gains and losses, amortization expense and special project costs, which are summarized in this morning's press release, adjusted EPS was $2 a share. This reflects a 5% increase over the prior year's adjusted EPS of $1.91, which excludes $0.14 gain on the milk divestiture. Included in this quarter's adjusted EPS is approximately $7 million or $0.04 per share of costs associated
For the nine months, net sales were $5,608.5 million against $6,003.6 million a year ago. Operating income was $834.8 million against $899.2 million a year ago. Income before income taxes was $716.5 million against $767.7 million a year ago. Net income was $481.9 million against $497.7 million a year ago. Net income per share assuming dilution was $4.14 against $4.16 a year ago. Net cash provided by operating activities was $794.8 million against $1,124.8 million a year ago. Additions to property, plant, and equipment were $136.6 million against $160.8 million a year ago. Adjusted operating income was $1,143.0 million against $1,158.8 million a year ago. Adjusted income before income taxes was $1,024.7 million against $1,027.3 million a year ago. Adjusted income was $689.2 million against $666.0 million a year ago. Earnings before interest, taxes, depreciation, and amortization(EBITDA) as $1,229.8 million against $1,222.0 million a year ago.
The company provided earnings guidance for the year ending April 30, 2017. For the year, the company expects net sales decrease approximately 5% from fiscal 2016, including a 2% impact of the U.S. canned milk divestiture. Adjusted earnings per share is expected to range from $7.60 to $7.70, based on 116.6 million shares outstanding. The Company reduced its effective tax rate guidance by 50 basis points to 32.5%. Included in the updated earnings guidance is $120 million of incremental synergies in fiscal 2017 compared to previous guidance of $100 million of incremental synergies. The company expects net income per common share - assuming dilution to be in the range of $5.38 to $5.48, net cash provided by operating activities to be in the range of $1,190 million to $1,240 million, addition to property, plant, and equipment to be $240 million and free cash flow to be in the range of $950 million to $1,000 million. For the full year, net sales are expected to decrease approximately 5% from $7.81 billion reported in fiscal 2016, revised from prior guidance expecting a decrease of 2% to 3%. Comparable net sales are expected to decrease by 3%, wider than the decrease of 0 to 1% previously expected.
For the third quarter, the company reported impairment charges of $75.7 million.
For the year ending April 30, 2017, the company expects impairment charges to be in the range of $0.44 per diluted.
The JM Smucker Company specializes in producing and selling food and animal nutrition products. Net sales break down by activity as follows:
- sale of coffee and food products (52.7%): coffee (Folgers® brands, Dunkin' Donuts® and Café Bustelo® brands) peanut butter, jams and jellies, oils, condensed milk, ready-to-use frostings and glazes, flour and baking ingredients, cookies, frozen potatoes, juices and beverages, dessert toppings, syrups, pickles, condiments, etc. (Smucker's®, Jif®, and Uncrustables® brands, etc.);
- sale of animal food products (35.5%): Rachael Ray Nutrish, Meow Mix ®, Milk-Bone®, Kibbles'n Bits®, 9Lives®, Nature's Recipe® and Pup-Peroni® brands;
- other (11.8%).
93.1% of net sales are from the United States.
The J. M. Smucker Company Reports Unaudited Consolidated Earnings Results for the Third Quarter and Nine Months Ended January 31, 2017; Provides Earnings and Impairment Guidance for the Year Ending April 30, 2017; Reports Impairment Charges for the Third Quarter Ended January 31, 2017