J. M. Smucker, Equity Residential, Apartment Investors, Ford and Altria

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: J. M. Smucker (NYSE: [ SJM ]), Equity Residential (NYSE: [ EQR ]), Apartment Investors (NYSE: [ AIV ]), Ford ([ F ]) and Altria (NYSE: [ MO ]).

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Here are highlights from Thursdaya�s Analyst Blog:

Smuckera�s Tops, Outlook Upbeat

The J. M. Smucker Company (NYSE: [ SJM ]), a leading marketer and manufacturer of processed and packaged goods, announced its solid fourth quarter and fiscal year earnings results.

Smucker posted earnings of $1.07 for the reported quarter, exceeding the Zacks Consensus Estimate by 27 cents and fourth quarter 2009 by 5 cents. In addition, fiscal 2010 earnings of $4.37 surpassed the Zacks Consensus Estimate by 20 cents and fiscal 2009 earnings by 61 cents.

For fiscal 2011, the company forecasts earnings of $4.50 a" $4.60 a share. This excludes restructuring and merger along with integration costs, but includes intangible asset amortization. The guidance is higher than the Zacks Consensus Estimate of $4.42 per share for the fiscal year. Shares of the company have gained more than 6% in Thursday trading on the NYSE as investors cheered the news.

Headquartered in Orrville, Ohio, Smucker posted flat year-over-year net sales of $1,069.1 million for the quarter, but for the fiscal year 2010 net sales jumped 23% to $4,605.3 million compared with fiscal 2009. The quarter experienced solid sales growth of U.S. Retail Consumer Market business, offsetting negative U.S. Retail Oils and Baking Market, and the U.S. Retail Coffee Market sales growth, resulting in a 1% annual volume decline. Excluding revenue from acquisitions, Smucker expects net sales to grow 3% year-over-year in fiscal 2011.

Gross margin for the quarter and fiscal 2010 expanded 280 basis points (bps) and 550 bps year-over-year to 40.2% and 38.8%, respectively. The quarter under review benefited from declining manufacturing and raw material costs compared with fourth quarter 2009.

CPI Report: Deflation?

One of the most important factors in holding down inflation is the cost of housing, which makes up over 31% of the overall index and over 40% of the core CPI. The biggest part of that is owners equivalent rent (OER), which is what you would pay if you were renting the home you own to yourself. OER has been unchanged in each of the last two months after a 0.1% decline in March, and is down 0.3% year over year. Regular rent, which tenants pay to landlords, has also been unchanged over the last two months and is down 0.1% over the last year.

High vacancy rates are keeping rental rates down. That is a pretty nasty double whammy for the apartment-oriented REITs like Equity Residential (NYSE: [ EQR ]) and Apartment Investors (NYSE: [ AIV ]).

Just about the only area showing any significant inflation is in the price of used cars. They rose 0.6% in May and are up 16.2% from a year ago. But even there the upward momentum is slowing, up at a 11.7% rate over the last six months and at a 5.0% rate over the last three months.

New cars, on the other hand, were up just 0.1% in May and are up just 1.9% year over year. The relatively slow rise in new car prices should put a cap on the rate of increase in used cars, unless people are starting to think that it is better to drive around in a 2003 Ford ([ F ]) Taurus than in a 2010 Ford Fusion. Somehow I doubt that is the case.

The other area showing robust price increases is tobacco, where prices rose 1.3% in May and are up 7.8% year over year. In part, that is good news for the likes of Altria (NYSE: [ MO ]), but some of that increase is due to higher taxes.

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J. M. Smucker, Equity Residential, Apartment Investors, Ford and Altria