On Thursday, J M Smucker Co (NYSE:SJM)’s shares declined -3.76% to $113.75.
J M Smucker Co (SJM) declared results for the fourth quarter and year ended April 30, 2015.
Executive Summary
The Company’s fiscal 2015 results were significantly influenced by the Big Heart Pet Brands (“Big Heart”) acquisition and related purchase accounting and financing activities during its fourth quarter. Counting these items, the Company’s stated results were as follows:
Results for the periods ended April 30, 2015 and 2014, comprise the operations of: (1) Big Heart since the completion of the acquisition on March 23, 2015; (2) Sahale Snacks, Inc. (“Sahale”) since the completion of the acquisition on September 2, 2014; (3) Enray Inc. (“Enray”) since the completion of the acquisition on August 20, 2013; and (4) the impact of the Company’s licensing and distribution agreement with Cumberland Packing Corp. (“Cumberland”), which commenced on July 1, 2013.
Noteworthy acquisition impacts and financing costs in the quarter comprised of:
- Other debt costs of $173.3 million, primarily related to the early redemption of the Company’s senior private placement notes;
- Big Heart operations for the six weeks since the close of the transaction, counting net sales of $244.5 million and an operating loss of $26.0 million, reflecting the unfavorable impact of a $47.0 million fair value purchase accounting adjustment to attained inventory sold during the quarter (“inventory purchase accounting adjustment”) and incremental promotional spending and marketing expense to support new product introductions and certain other initiatives;
- Net incremental interest expense related to the new debt structure; and
- The issuance of 17.9 million of the Company’s common shares and related impact on the calculation of weighted-average shares outstanding.
Results in the above table also reflect:
- Net sales declines in the fourth quarter of 2015, contrast to 2014, in the U.S. Retail Consumer Foods segment driven by lower net price realization and volume and in the U.S. Retail Coffee segment driven by volume; and
- Operating income not taking into account the impact of restructuring and merger and integration costs and unallocated derivative gains and losses (“certain items affecting comparability”) was unfavorably influenced in the fourth quarter of 2015 by the results of the U.S. Retail Coffee segment and an enhance in general and administrative expenses, contrast to 2014.
The J. M. Smucker Company manufactures and markets branded food products worldwide. The company operates through three segments: U.S. Retail Coffee; U.S. Retail Consumer Foods; and International, Foodservice, and Natural Foods. It offers coffee, peanut butter, fruit spreads, shortening and oils, baking mixes and ready-to-spread frostings, fruits, canned milk, flour and baking ingredients, fruit and vegetable juices and beverages, frozen sandwiches, ready-to-eat waffles, toppings, syrups, jelly products, pickles, condiments, and grain products.
McDermott International (NYSE:MDR)’s shares dropped -3.16% to $5.52.
McDermott International (MDR) declared it has been awarded an offshore contract by Petróleos Mexicanos (PEMEX) for the engineering, procurement, construction, installation (EPCI) and pre-commissioning of the Ayatsil-C replacement jacket and associated deck installation.
McDermott anticipates to use its in-house engineering and procurement experts, Altamira fabrication yard located in Mexico, Intermac 600 transportation and launch barge and heavy-lift Derrick Barge 50 vessel to complete the installation of all structures. The total weight of the facilities is about 14,800 tons. Completion is planned for the fourth quarter of 2016.
McDermott International, Inc. operates as an engineering, procurement, construction, and installation company worldwide. The company operates through three segments: Asia Pacific, Americas, and the Middle East. It focuses on designing and executing offshore oil and gas projects.
At the end of Thursday’s trade, Canadian Natural Resource Ltd (USA) (NYSE:CNQ)‘s shares dipped -1.12% to $30.15.
Canadian Natural Resource Ltd (USA) (CNQ) declares that on June 3, 2015 it priced C$500 million principal amount of notes through the reopening of its 2.89% medium-term notes, series 2, due August 14, 2020 sold at a price of C$101.932 per $100 principal amount to yield 2.49% to maturity, which have been sold to investors in Canada.
Net proceeds from the sale of the notes will be used for general corporate purposes regardingthe Company’s core regions of operations. The Company may also use the net proceeds for repayment of indebtedness.
CIBC World Markets Inc. and RBC Dominion Securities Inc. acted as joint lead agents and joint bookrunners for the offering. BMO Nesbitt Burns Inc., Scotia Capital Inc., Altacorp Capital Inc., Desjardins Securities Inc., and Merrill Lynch Canada Inc. acted as co-agents.
The sale of the notes was the second issuance under the Canadian base shelf prospectus dated November 1, 2013 that allows for the issuance of debt securities in an aggregate principal amount of up to C$3 billion.
Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen, and synthetic crude oil (SCO).
Two Harbors Investment Corp (NYSE:TWO), ended its Thursday’s trading session with -0.28% loss, and closed at $10.54.
Real-estate investment trusts have enjoyed nearly unprecedented success in recent years, as long periods of low interest rates have assisted bolster prospects for mortgage REIT Two Harbors Investment (NYSE: TWO) and many of its peers. Yet investors have become increasingly convinced that the Federal Reserve will raise interest rates in the near future, and they fear this will destroy the opportunity that Two Harbors has had to profit. Let’s go over three key metrics that could have a big impact on Two Harbors Investment’s business and future results.
Two Harbors’ net interest margins are well above what peers Annaly Capital (NYSE: NLY) and American Capital Agency (NASDAQ: AGNC) routinely manage to earn, and that stems largely from Two Harbors’ investment philosophy. Rather than staying with the most common mortgage-backed assets, Two Harbors has looked at less popular but more lucrative ways to generate profit, counting commercial mortgage debt. Securitizing loans has also brought in profits, and in general, Two Harbors’ flexibility is a competitive advantage that assists push its returns higher.
Canadian Natural Resources Limited acquires, explores for, develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). The company offers light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen, and synthetic crude oil (SCO). Its midstream assets comprise three crude oil pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose.
Mortgage servicing rights give Two Harbors the stream of income that lenders pay to the businesses that handle collection of mortgage payments and distribution of those payments to the various investors who own them, either directly or through securitized pools. Specifically, Two Harbors concentrates on what are known as excess rights, which represent any profit left over after paying for the actual service costs of those mortgages.
Two Harbors is not invulnerable to the possibility of higher short-term interest rates from the Federal Reserve. Yet with the danger so visible, Two Harbors has already taken steps to protect itself and its shareholders from the worst of the fallout from rising rates, and investors should take comfort in the knowledge that the REIT has sought to remain ahead of the curve in anticipating future policy moves and maximizing its profits from them.
Two Harbors Investment Corp. operates as a real estate investment trust (REIT) that focuses on investing in, financing, and managing residential mortgage-backed securities (RMBS), residential mortgage loans, mortgage servicing rights, commercial real estate debt and related assets, and other financial assets.
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