The J. M. Smucker Company (SJM) has reported a 42.20 percent plunge in profit for the quarter ended Apr. 30, 2017. The company has earned $110.40 million, or $0.96 a share in the quarter, compared with $191 million, or $1.61 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $206.70 million, or $1.80 a share compared with $265.30 million or $2.23 a share, a year ago.
Revenue during the quarter went down marginally by 1.32 percent to $1,783.80 million from $1,807.60 million in the previous year period. Gross margin for the quarter contracted 180 basis points over the previous year period to 36.26 percent. Total expenses were 88.97 percent of quarterly revenues, up from 86.39 percent for the same period last year. That has resulted in a contraction of 259 basis points in operating margin to 11.03 percent.
Operating income for the quarter was $196.70 million, compared with $246.10 million in the previous year period.
However, the adjusted operating income for the quarter stood at $338.80 million compared to $331 million in the prior year period. At the same time, adjusted operating margin improved 68 basis points in the quarter to 18.99 percent from 18.31 percent in the last year period.
"In fiscal 2017, we grew adjusted EPS by 7 percent over the prior year," said Mark Smucker, chief executive officer. "In the new fiscal year, we continue to execute our strategic plan for sustainable, long-term growth by capitalizing on changes in consumer preferences and the retail environment. We will fuel the momentum of our growth brands like Smucker's Uncrustables, Nature's Recipe, and Café Bustelo, while supporting our base businesses in coffee, peanut butter, pet food, and pet snacks. Accelerated cost savings and expanded capabilities are key components of our multi-dimensional strategy to deliver top and bottom line growth and increase shareholder value."
For financial year 2018, The J. M. Smucker Company forecasts diluted earnings per share to be in the range of $6.29 to $6.49. It forecasts diluted earnings per share to be in the range of $7.85 to $8.05 on adjusted basis for the same period.
Operating cash flow drops significantly
The J. M. Smucker Company has generated cash of $1,059 million from operating activities during the year, down 27.52 percent or $402 million, when compared with the last year.
The company has spent $189.70 million cash to meet investing activities during the year as against cash inflow of $21.70 million in the last year. It has incurred net capital expenditure of $191.90 million on net basis during the year, down 2.79 percent or $5.50 million from year ago.
The company has spent $806.10 million cash to carry out financing activities during the year as against cash outgo of $1,498.90 million in the last year period.
Cash and cash equivalents stood at $166.80 million as on Apr. 30, 2017, up 51.91 percent or $57 million from $109.80 million on Apr. 30, 2016.
Debt remains almost stable
The J. M. Smucker Company has recorded a decline in total debt over the last one year. It stood at $5,398.50 million as on Apr. 30, 2017, down 0.58 percent or $31.50 million from $5,430 million on Apr. 30, 2016. Interest coverage ratio deteriorated to 4.88 for the quarter from 6.08 for the same period last year.
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