Why J.M. Smucker (SJM) Is Tumbling on Friday

NEW YORK (TheStreet) -- Peanut butter and fruit spreads maker J.M. Smucker  (SJM) was tumbling on Friday after depressed sales caused it to cut full-year guidance.

By midafternoon, shares had taken off 4% to $91.38. Trading volume of 3.5 million was more than three times its three-month daily average.

In the three months to January, the company reported revenue 6% lower than a year ago to $1.47 billion. Analysts surveyed by Thomson Reuters had expected sales of $1.53 billion.

Third-quarter net income of 66 cents a share fell short of consensus by 2 cents.

Net sales were lower primarily due to the impact of a 6% reduction in net price realization, a result of price declines on coffee and peanut butter since the beginning of the year-ago quarter.

By segment, U.S. retail coffee dropped 8% to $578.9 million, U.S. retail consumer foods decreased 4% to $557.8 million, and international sales fell 6% to $328.8 million.

"We continue to navigate through a challenging operating environment. This journey is supported by our leading market position with strong and healthy brands," said CEO Richard Smucker in a statement.

The Orrville, Ohio-based business now sees revenue for the full year ending April declining 5% to total sales of around $5.6 billion. Analysts had expected full-year sales of $5.78 billion.

Per-share earnings guidance was downwardly revised to between $5.55 and $5.60 from $5.72 to $5.82. Analysts had forecast net income of $5.78 a share.

"While we expect our fourth quarter earnings to be down compared to a strong quarter last year, we want to reiterate that our business fundamentals remain sound and our prospects for ongoing earnings growth continue," added Smucker.

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