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With a Name Like Smucker's, Earnings Have to Be Good


Shares are up as company exceeds expectations.

Minyan Morning Memo

One to watch: J.M. Smucker
(SJM) may manufacturer Crisco shortening but there shouldn't be any short-selling in the stock today after it handily exceeded earnings expectations earlier this morning. Shares are up after the maker of jam, jelly, and Jif beat the Street for its fiscal first quarter, reporting $0.92 per share excluding items. Although over 100 years old, the firm, whose brand portfolio also includes Pillsbury, benefited from an extremely recent acquisition. Last year's $3 billion buy of Folgers from Procter & Gamble (PG) is a gamble that looks to have paid off, doubling its revenue base and propelling the company to the number-one position among America's coffee producers.

Even as today's Wall Street Journal says Starbucks (SBUX) is price-hiking its more complex caffeinated offerings, Smuckers' less pricey packaged granules generated good sales with consumers increasingly turning to belt-tightening. Commodity costs are always a wild card and there's no let up in private-label competition, but the company remains king of this country's cupboards and also has paid dividends since the dawn of the 1960's.

What just happened:
Stocks rose for a third straight session, taking the S&P 500 up over 1,000 again to within striking distance of its high for the year after the Index of Leading Economic Indicators posted a fourth successive increase. American International Group (AIG) and Citigroup (C) both attracted groupies, gaining 21.2% and 8.4% respectively. Gamestop (GME) saw stop-loss orders aplenty after falling 7.03% on lower-than-expected earnings. Big 5 Sporting Goods (BGFV) (up 8.4%) and Dick's Sporting Goods (DKS) (7.01% higher) both flexed their muscles, as did kids clothing maker Gymboree (GYMB) which rose 11.9%. Competitor Children's Place (PLCE) was put in its place however, sliding 3.9%. Sears (SHLD) also showed its softer side; it slipped 12% after reporting a loss.

New Jersey gained 5,900 jobs in July, though some residents still appear to have too much time on their hands. Plaxico Burress was put in prison until 2011 for injuring little more than his own pride on the day Lockerbie's bomber walked away scot-free on "compassionate grounds" after killing 270.

What's happening:
Asia ended mixed, Shanghai shining with a 1.7% gain though Japanese markets fell. Over in Europe, equities are up after encouraging reports on French and German manufacturing. Here at home, equities have begun the day by trading higher, though the opening bell may be radioactive after being rung by representatives from nuclear energy play Shaw Group (SGR).

What will happen:
In economics, July existing-home sales rose 7.2%, the highest rate since the summer of '07. Ben Bernanke is beginning his keynote speech at the Jackson Hole symposium. And we'll be learning about earnings from AnnTaylor (ANN).

Tonight's Mega Millions jackpot is impressive after remaining unclaimed for a while. Its streak without a winner, however, is nothing compared to Italy's state-sponsored lottery, which has failed to pay out since January. Apparently the government can't give money away in Europe.
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No positions in stocks mentioned.
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