- The Washington Times - Friday, February 14, 2003

Here is a look at more of Friday's top business stories:

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Earnings jump at J.M. Smucker

ORRVILLE, Ohio, Feb. 14 (UPI) — Jelly maker J.M. Smucker Co., citing its acquisition of the Jif and Crisco brands, said its third-quarter net income for the period ended January 31 jumped to $28 million, or 56 cents a share, from $7.9 million, or 34 cents a share during the same period a year earlier.

Analysts on Wall Street had expected the company to post a net income of 54 cents a share, according to Thomson First Call.

Sales surged to $340.8 million from $168.4 million a year ago. The Jif and Crisco brands, which Smucker bought from Procter & Gamble Co. last year, added $167.6 million to third-quarter sales, the company said.

Excluding the contribution of the Jif and Crisco brands, sales increased 3 percent and quarter-over-quarter gains were realized in all business areas other than industrial.

Richard K. Smucker, president and co-chief executive officer, said, "We were pleased to see strength across the board. Once again, our traditional brands performed well while we are seeing the benefits of our investments in the Jif and Crisco brands. We continue to invest behind our brands and in new products to ensure future growth."

Looking ahead, Smucker raised its fiscal 2003 forecast and said it expects to earn $2.10 to $2.14 a share for the year.

The company had previously forecast 2003 earnings in a range between $1.98 to $2.05 a share.

Analysts are expecting Smucker to report a net income of $2.10 a share for the year. The company said fourth-quarter earnings may be hurt by additional marketing support for the uncrustables products.

J. M. Smucker was founded in 1897 when the company's namesake and founder sold his first product — apple butter — from the back of a horse-drawn wagon. Today the company distributes its products in more than 45 countries.

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Navistar posts loss

WARRENVILLE, Ill., Feb. 14 (UPI) — Navistar International Corp., the nation's largest commercial truck and mid-range diesel engine producer, said it posted a first quarter loss but also said it still expects to be marginally profitable for the full year.

The producer of International brand trucks and diesel engines said it posted a first-quarter loss from continuing operations for the period ended January 31 of $98 million, or $1.47 a diluted share, compared with a net loss of $53 million, or 88 cents a diluted share during the same period a year earlier.

The latest loss, including discontinued operations, amounted to $99 million, or $1.49 a diluted common share, Navistar said.

Analysts on Wall Street had expected the company to post a net loss of $1.49 a share, according to Thomson First Call.

The company said consolidated sales and revenues from its manufacturing and financial services operations inched up to $1.6 billion from $1.5 billion a year ago.

Looking ahead, John R. Horne, Navistar chairman and chief executive officer, said a small second quarter loss of 25 cents to 30 cents per diluted share is anticipated if there is a favorable resolution of negotiations with Ford Motor Company in regard to the delay of its V-6 engine program.

Horne emphasized the company should return to profitability in the third and fourth quarters and be profitable for the full year as the result of improved industry demand, increased truck and engine shipments, realization of fixed costs reductions and resolution of the Ford V-6 issues.

"The plans we have put in place for our previously announced cost reduction of $100 million in 2003 were on track through the first quarter," Horne said.

"We have realigned our manufacturing facilities to deliver scale for focused products and have invested to make those plants the most efficient in the industry. We believe the foundation is in place to return to profitability in fiscal 2003 and in the future, to be profitable at all points in the business cycle," he added.

Turning to the 2003 outlook for new truck sales, Horne said that the company's forecast for industry demand was based on the assumption that orders for new medium and heavy trucks would improve significantly in the third and fourth quarters of fiscal 2003. He noted that leading truck industry indicators such as pricing, used truck inventories and truck tonnage appear to have stabilized. Additionally, industry orders increased significantly in January for both medium and heavy trucks. Medium truck orders had been very weak prior to January.

"The orders we received in November and December were below our expectations when we developed our estimate for Class 6-7 demand in 2003," Horne said.

"We experienced a significant increase in bidding activity for medium trucks over the past few months. It was only in January that we saw a significant improvement in actual orders. This increase has encouraged us that our industry forecast for medium truck demand will be met," Horne added.

The company noted it has not changed its forecast for industry volume for the year ending Oct. 31, 2003. As previously forecast, medium truck, or Class 6-7, volume is expected to increase 13 percent to 82,000 units; heavy, or Class 8, volume should decline 4 percent to 156,000 units, while school bus volume is forecast at 27,500 units, consistent with 2002.


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