Peanut Butter Sours J.M. Smucker

J.M. Smucker Co. (SJM - Snapshot Report) reported third-quarter profit that topped market expectations but its shares tumbled on Wednesday as the jelly maker lowered its 2009 guidance.  

In the latest quarter ended Jan. 31, J.M. Smucker’s net income rose 84% to $77.9 million, or 68 cents per share. Excluding items, the Orrville, Ohio-based company’s profit of 88 cents a share beat the consensus estimate by 2 cents. Results for the period were significantly helped by the company’s acquisition of Folgers coffee in November last year. Its quarterly sales also soared, up 78% to $1.18 billion.

However, the company said sales in its peanut-butter segment suffered following the recent recall of salmonella-tainted products made by Peanut Corporation of America. Although J.M. Smucker did not have to recall any of its food spreads, it sees the softness in demand continuing through the fourth quarter and hurting 2009 profit by 5 cents to 7 cents per share.

As costs are also expected to remain higher, the company guided to earnings in the range of $3.15 and $3.30 per share in 2009, down from a prior forecast of $3.45 and $3.50 per share. The consensus estimate was pegged at $3.46 a share. Shares of J.M. Smucker fell nearly 6% to $38.80 at noon on the New York Stock Exchange.