Higher sales lift Hormel earnings
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AUSTIN, Minn. – Earnings at Hormel Foods rose 2 percent during the third quarter on stronger sales across its segments, including solid returns in the company’s Grocery Products business due to benefits from Skippy peanut butter.
For the quarter ended July 28, the company had earnings of $113,635,000, equal to 43 cents per share on the common stock, which compared with $111,167,000, or 42 cents per share, during the same quarter of the previous year. Sales for the quarter were $2,159,525,000, up 8 percent from $2,008,188,000.
“Our Grocery Products segment benefitted from good performance by our new Skippy business,” said Jeffrey M. Ettinger, chairman and CEO. “Our Jennie-O Turkey Store segment delivered a strong quarter, despite higher grain costs and lower commodity meat prices. Our International business continues to achieve impressive results, led by strong export sales of our Spam family of products and fresh pork as well as the addition of the Skippy business. Higher pork input costs squeezed margins for our retail value-added products, particularly bacon, decreasing our Refrigerated Foods segment results during the quarter.”
The Grocery Products segment had an operating profit of $52,962,000, up 32 percent from $40,052,000 during the same quarter of the previous year. Sales for the quarter were $370,297,000, up 25 percent from $297,177,000.
The Refrigerated Foods segment had an operating profit of $44,769,000, down 26 percent from $60,757,000 during the same quarter of the previous year. Sales for the segment were $1,068,587,000, up 2 percent from $1,043,311,000. Leading sales were Hormel party trays, Natural Choice deli meats, and Cure 81 hams, in addition to foodservice sales of Fire Braised meats and Pecanwood bacon.
Operating profit in the Jennie-O Turkey Store segment was $45,623,000, up 17 percent from $39,106,000 during the same quarter of the previous year. Sales for the segment were $367,125,000, up 4 percent from $351,604,000. Ground turkey chubs and turkey bacon drove sales, according to the company.
For the nine months ended July 28, the company saw income rise slightly to $368,871,000, or $1.39 per share, which compared with $367,449,000, or $1.39 per share, during the same period of the previous year.
“Earnings reported in the third quarter keep us on track to achieve results consistent with our adjusted annual guidance range of $1.88 to $1.96 per share,” Ettinger said. “Toward the end of the third quarter we were able to adjust for higher raw material costs in key product categories such as bacon. We anticipate Jennie-O Turkey Store will continue to rebound from headwinds faced earlier in the year, which should benefit results through the rest of fiscal 2013. We expect four of five segments to outperform in the fourth quarter, with only Specialty Foods expected to experience a down quarter.”