A flurry of acquisitions in the past fiscal year bolstered top- and bottom-line gains for J.M. Smucker Co. despite a fourth-quarter dip in profit, the company told investors Thursday.
The Orrville-based company said its earnings for the fourth quarter ended April 30 totaled $37.1 million, or 67 cents a share, down 13 percent from $42.5 million, or 75 cents a share, a year ago. Part of the decline stems from the absence of a gain on peanut-butter sales, which jumped last fourth quarter when Smucker grabbed more market share as a competitor temporarily left the market.
The quarter also includes a $4 million insurance settlement following storm damage at a Tennessee distribution center and $2.08 million in merger and integration costs, which hit nearly $8 million for the year.
Smucker over the past fiscal year struck several acquisition deals, including the $248 million purchase of Gahanna's Eagle Family Foods Inc. The company also made deals to buy frozen fruit brand Europe's Best Inc. and the Carnation Milk brand, both of Canada, and Knott's Berry Farm.
A $3.3 billion all-stock deal to buy the Folgers coffee line from Cincinnati-based Procter & Gamble Co. is pending and should close in the fourth quarter of 2008, the company said.
Fourth-quarter sales increased 20 percent to $590 million from $493.5 million a year ago. The company attributed more than half its sales growth to acquisitions.
Smucker said it suffered in the fourth quarter from margin-squeezing higher raw material costs, mainly for soybean oil and wheat. The cost of sales jumped to 69 percent of revenue in the fourth quarter, up from an unusually low 64 percent a year ago.
Full-year profit grew 8 percent to $170.4 million, or $3 a share, versus $157.2 million, or $2.76 a share, in fiscal 2007.
Revenue for the year increased 17 percent to $2.52 billion, up from $2.15 billion the year before. Acquisitions added about $280 million to sales.
Smucker (NYSE:SJM) makes and markets jams, jellies and other food brands, including Pillsbury, Eagle Brand and Hungry Jack. The company employs more than 3,000.
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