While The J.M. Smucker Company (NYSE:SJM) had an excellent year, its quarterly results left much to be desired. Its revenue and free cash flow declined 1% and 40% respectively in its most recent quarter. The top line decline stems from the price declines taken on Jif peanut butter and coffee.
Competitors ConAgra Foods, Kraft Foods Group, and Mondelez International all experienced increases in revenue of 13%, 2% and 1% respectively in their most recent quarter. Free cash flow of all three companies declined 9%, 236%, and 48% respectively.
J.M. Smucker doesn’t possess a heavy debt burden. Long term debt to equity and total debt to equity equate to 38% and 75% respectively. The J.M. Smucker Company (NYSE:SJM)’s times interest earned holds steady at 9.75. Its debt laden counterparts, ConAgra, Kraft Food Groups’, and Mondelez’s long term debt to equity ratios stood at 63%, 279%, and 48% respectively in their last fiscal years. The times interest earned on ConAgra Foods, Kraft Foods Group, and Mondelez calculates to 4, 10, and 2 respectively.
J.M. Smucker shareholders can breathe easier knowing the company possesses a little greater capability to make interest payment on its debt.
The J.M. Smucker Company (NYSE:SJM) expects revenue for FY 2014 to remain relatively even due to price cuts taken in FY 2013. The company expects commodity costs to soften, lowering its overall cost of goods sold. Increased capital expenditures resulting from investment in expanding capacity for its Jif peanut butter and Uncrustables products should leave free cash flow even with this year.
J.M. Smucker possesses a strong portfolio of brands and plans to spend the next year expanding its major product lines. In addition, J.M. Smucker provides its investors with a decent dividend yield. J.M. Smucker possesses the groundwork for superior long term performance. Its competitors are spread a little thin (pardon the pun) and operate under a heavier debt burden which could hinder their long term performance.
The article 6 Takeaways From J.M. Smucker’s Earnings Announcement originally appeared on Fool.com and is written by William Bias.
William Bias owns shares of Kraft Foods Group and Mondelez International. The Motley Fool has no position in any of the stocks mentioned. William is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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