JM Smucker shares dive after first quarter results

Cost-cutting at JM Smucker lifted earnings first quarter earnings at the food manufacturer, helping to offset the impact from a sharp drop in revenues.

Quarterly revenues fell 7% from the year-ago level to reach $1.8bn (consensus: $1.9bn), mainly as a result of declines for its Dunkin'Donuts K-Cup coffee pods, the company said in a statement.

On a comparable basis revenues were down 5%, with four-fifths of the decline attributable to coffee.

However, adjusted earnings per share improved 16% versus the year-ago period to reach $1.86 (consensus: $1.74), thanks to synergies, a lower tax rate and a lower number of shares outstanding.

Gross margins improved from 37.3% one year ago to 39.8%.

Orville, Ohio-based JM Smucker stuck to its previous guidance for full-year fiscal 2017 EPS of between $7.60 to $7.75 (consensus: $7.70).

However, like-for-like sales were now seen in a range between flat and a drop of 1.0%, versus its previous expectation for an increase of 1.0%.

Net income rose 25% to $170m.

Cash from operating activities fell 22% to $238.9m, in large part due to a non-recurring tax refund of $49.6m booked in the previous year.

As of 16:17 BST its shares were down by 8.30% to $143.22.