ORRVILLE, OHIO – Net income of The J.M. Smucker Co. in the first quarter ended July 31 was $126.6 million, equal to $1.19 per share on the common stock, up 14% from $110.9 million, or $1 per share, in the same quarter in 2012. Net sales were $1,350.9 million, down 1%.

Excluding special items, such as restructuring, merger and integration costs, and other special project costs, income was up 2%.

Richard K. Smucker, chief executive officer, cast the results in a positive light.

“There is clearly momentum across our business as we experienced our strongest first-quarter earnings ever,” he said. He predicted continued momentum through fiscal 2014 “as we further invest in our brands, our infrastructure and our people.”

In its outlook for fiscal 2014, Smucker raised its forecast of earnings per share to $5.72 to $5.82, up 7c from its previous guidance.

The U.S. Retail Consumer Foods segment, Smucker’s largest measured by sales and second largest measured by profit, had operating profit of $96.4 million in the first quarter, down 11% from the same period last year. Sales were $536.4 million, up 1%.

Volume trends were strong across the segment, with gains of 8% for Jif brand versus the first quarter of fiscal 2013; 22% for Uncrustables frozen sandwiches; 11% for Crisco; 2% for Pillsbury flour, frosting and bakery mixes; and 4% for canned milk.

Commenting on the lower profits for the segment, the company said, “Commodity costs were modestly lower in the first quarter of 2014, compared to 2013, but did not compensate for overall lower prices, most notably for peanut butter. The company decreased peanut butter prices by approximately 10% late in its fiscal 2013 third quarter in anticipation of further reductions in peanut costs later in fiscal 2014.”

Operating profits of the U.S. Retail Coffee business were $146 million in the first quarter, up 16% from $126.4 million in the same period last year. Sales were $514.4 million, down 1%.

Volume in the quarter rose 4% from the same period in fiscal 2013, with Folgers brand volume up 4% and Dunkin’ Donuts packaged coffee sales up 6%. The sales decline reflected a price cut of about 6% taken in February 2013. K-Cup sales rose 14% during the quarter, or about $7.5 million.

The 16% profit improvement in the quarter was due to pressure in the prior year quarter when prices were lowered before green coffee costs had come down.

In an Aug. 21 conference call, Vincent C. Byrd, president and chief operating officer, commented on green coffee costs, which peaked in price at about $3 per lb in 2011.

“Green coffee costs have retreated from their record highs of two years ago, and arabica coffee futures have traded in the range of $1.15 to $1.35 over the last several months,” Mr. Byrd said in the conference call. “While this has lowered our overall coffee costs, at this point they have not declined to a level at which we would implement a list price decline. Instead, we will use other pricing strategies to pass along the benefits of the lower green coffee cost to our customers and consumers.”

Mr. Byrd also commented on press accounts that he said raised questions about Smucker’s relationship with Green Mountain Coffee Roasters, Inc. Under the agreement, signed in 2010, G.M.C.R. manufactures and distributes single-cup packages of certain Smucker brands.

“We recognize there has been significant press recently regarding their contractual arrangements with other partner brands,” he said. “We believe the recent extension of certain partnership agreements supports our view that Green Mountain is the highest quality and most efficient producer of K-Cups in the industry.

Specific to our company, we typically do not discuss details related to our contracts. However, let me assure you that we are pleased with our contractual arrangement. We have a multi-year agreement in place that has been periodically amended to take into consideration current and future opportunities that are expected to provide additional value to both companies, as well as to our customers and consumers.”

In May, Green Mountain signed a five-year contract with Starbucks Corp. That Smucker signed a long-term deal with Green Mountain significantly earlier was emphasized by Mr. Smucker on the call.

“We recognized and believed that they were going to be the long-term key winner in this category,” he said.