NEW YORK (TheStreet) -- The J.M. Smucker Co. (SJM) shares are rising, up 2.5% to $105.40, on Thursday following the release of the company's fourth quarter earnings results.
The food products manufacturer reported earnings of $1.21 per share, 5 cents better than Capital IQ consensus estimates.
Revenues fell -7.9% from the previous year to $1.23 billion, slightly below analysts $1.24 billion estimates.
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TheStreet Ratings team rates SMUCKER (JM) CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SMUCKER (JM) CO (SJM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SMUCKER (JM) CO has improved earnings per share by 12.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SMUCKER (JM) CO increased its bottom line by earning $5.00 versus $4.06 in the prior year. This year, the market expects an improvement in earnings ($5.58 versus $5.00).
- 39.99% is the gross profit margin for SMUCKER (JM) CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.37% is above that of the industry average.
- Net operating cash flow has increased to $421.10 million or 29.96% when compared to the same quarter last year. In addition, SMUCKER (JM) CO has also vastly surpassed the industry average cash flow growth rate of -27.01%.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.88 is somewhat weak and could be cause for future problems.
- SJM, with its decline in revenue, slightly underperformed the industry average of 3.3%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: SJM Ratings Report