Hormel income declines on Jennie-O Turkey, acquisitions

by Meat&Poultry Staff
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AUSTIN, Minn. — Weaker results in the Jennie-O Turkey Store segment, as well as costs related to the Skippy acquisition, contributed to a 2 percent decline in earnings at Hormel Foods Corp. during the second quarter.

For the quarter ended April 28, the company had earnings of $125,520,000, equal to 47 cents per share on the common stock, which compared with income of $127,887,000, or 49 cents per share, during the same quarter of the previous year. Sales for the quarter were $2,152,686,000, up 7 percent from $2,012,859,000 during the same quarter of the previous year.

“We were pleased to deliver sales and volume growth, despite harvest reductions in both our Refrigerated Foods and Jennie-O Turkey Store operations,” said Jeffrey Ettinger, chairman of the board, president and chief executive officer. “In terms of operating profits, improved results by our Specialty Foods, Grocery Products, and International & Other segments did not fully offset weaker results by our Jennie-O Turkey Store segment. Our earnings were also impacted by non-recurring costs related to our acquisition of the Skippy peanut butter business in the amount of $9 million. Overall, earnings per share of 46c during the quarter keep us on track to maintain our full year guidance.”

The Grocery Products segment had an operating profit of $47,295,000, up 10 percent from $42,858,000 during the same quarter of the previous year. Sales for the segment were $393,505,000, up 49 percent from $263,993,000.

The Refrigerated Foods segment had operating profit of $54,680,000, up 3 percent from $53,009,000 during the same quarter of the previous year. The segment had sales of $1,011,370,000, down 2 percent from $1,031,975,000.

Operating profit within the Jennie-O Turkey segment was $51,999,000, down 26 percent from $70,198,000 during the same quarter of the previous year. The segment had sales of $384,739,000, down 2 percent from $391,053,000.

For the six months ended April 28, the company saw earnings decline slightly to $255,236,000, or 97 cents per share, which compared with $256,282,000, or 97 cents, during the same period of the previous year. Sales for the six months were $4,268,927,000, up 5 percent from $4,052,298,000.

The company also said it is maintaining its full-year guidance of $1.93 to $2.03 per share on anticipated benefits from the Skippy acquisition and improved results in Jennie-O Turkey.
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