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Friday, February 18, 2011

Smucker raises 2011 outlook coffee forecast

Smucker raises 2011 outlook coffee costs : J.M. Smucker Co (SJM.N), the maker of Jif peanut butter and Folgers coffee, reported higher-than-expected quarterly results and raised its full-year outlook as it passed on rising food and beverage costs to its customers, sending its shares to their lifetime high.

In another encouraging sign for Smucker, its sales volume rose for the first time in four quarters as gains in products such as Crisco oils, Jif and Dunkin' Donuts packaged coffee more than offset lower volumes for top brands like Folgers and Pillsbury.

To offset higher coffee costs, Smucker -- a licensee of Dunkin' Donuts -- has raised prices thrice in less than a year. Higher prices contributed about 4 percent to its third-quarter net sales.

And the company, which competes with Kraft Foods' (KFT.N) Maxwell House and Yuban brands, did not rule out another price hike.

"If something doesn't happen in a reduction (in terms of coffee costs), we may be faced with another review of that in the first quarter," a company executive said on a conference call with analysts.

Arabica coffee futures have surged 85 percent since June, the highest level in 13- years.

For 2011, the company expects to earn $4.60-$4.65 a share on an adjusted basis. Its earlier forecast was $4.55-$4.65 a share. The company expects net sales to grow 4 percent, up from its previous outlook of a more than 3 percent rise.

Shares of the company, which has a market cap of about $7.5 billion, were up $2.10 at $66.05 in midday trading on Thursday on the New York Stock Exchange. They touched a high of $66.79 earlier in the day. Articel from Reuters... For the latest updates PRESS CTR + D or visit Stock Market news Today

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