Turkey, international segments drive Hormel earnings

by Keith Nunes
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AUSTIN, MINN. — Strong performance by Hormel Foods Corp.’s Jennie-O Turkey Store and International business units helped propel the company to record earnings and revenues during fiscal year 2012. For the year ended Oct. 28, the company recorded net income of $500,050,000, equal to $1.90 per share on the common stock, an increase compared with the previous fiscal year when net income was $474,195,000, or $1.78 per share.

Sales for the year were $8,230,670,000, up 4% from $7,895,089,000 for the previous year.

“In looking at the full year, we finished in the upper half of our guidance range,” said Jeffrey M. Ettinger, chairman, president and chief executive officer of Hormel Foods. “We delivered sales growth of 4%, ending the year at a record $8.2 billion, with all five segments registering increases. We also grew earnings per share by 7%, finishing at record earnings of $1.86 per (diluted) share. We enjoyed another strong performance by our Jennie-O Turkey Store and International teams. Our Grocery Products and Specialty Foods segments also generated nice profit increases for the year.”

During the year, Jennie-O Turkey Store and Hormel International Foods saw their operating profits rise 16% and 38%, respectively. The company’s Grocery Products business unit saw its operating profit rise 12%, while the company’s Refrigerated Foods segment saw its operating profit decline 22%.

“We expect to deliver sales and earnings growth in fiscal 2013,” Mr. Ettinger said. “In particular, we are looking for our Refrigerated Foods, Grocery Products, Specialty Foods and All Other (International) segments to drive profit growth in fiscal 2013, as our Jennie-O Turkey Store segment goes up against higher grain costs and historically high results. We plan on making additional cuts to both our turkey and pork harvest levels during fiscal 2013, to reduce our exposure to volatile commodity markets. Taking all of the relevant factors into account, we are setting our 2013 guidance range at $1.90 to $2 per share.”

For the fourth quarter of fiscal 2012, Hormel recorded net income of $132,601,000, equal to 50c per share. The previous year Hormel’s earnings were $117,309,000, or 44c per share.

Sales for the quarter were $2,170,184,000, which compared with sales of $2,103,898,000 the previous year.

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