When the J.M. Smucker Company (NYSE: SJM) presents at tomorrow's Lehman Brother Back-to-School Consumer Conference, look for the company to make prominent mention of the fact that its brand of peanut butter, Jif, was not involved in the peanut butter recall earlier this year. But Smucker certainly profited from the recall with increased peanut butter sales that resulted in a 40% or $19.6 million rise in 1Q 2008 operating income. Net sales for the quarter increased 17% to $561.5 million, and diluted EPS increased 42% to $0.71. Investors always like when earnings grow faster than sales.

Smucker recently completed the acquisition of Eagle Brands, maker of canned milk and other baking products. This is a good fit with other Smucker baking related products including Pillsbury and Crisco. During the first complete quarter following acquisition, Eagle Brands contributed $43.5 million to net sales. The company sold its manufacturing facility in Scotland as well as its nonbranded grain products in Canada in order to concentrate on domestic manufacturing and quality control.

The company is sticking with its previously mentioned FY 2008 guidance of sales growth of 8%, half from organic growth and half from acquisitions. Commodity costs will continue to increase for Smucker, as for its competition. Smucker needs to keep a tighter lid on administrative and selling expenses in light of costs increases, some of which cannot be passed on to consumers in the form of higher prices. Interest expense increased by $4 million due to Eagle Brands acquisition, so the company must monitor its debt load.

The stock is up almost 10% for the year, opening the year trading at $49.30, and currently trading at $54.86, with a dividend yield of 2.2%.