Hormel net rises despite weakness in Jennie-O Turkey Store

by Staff
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AUSTIN, MINN. — Earnings at Hormel Foods Corp. were nearly flat during the third quarter, lifted by higher sales but limited as strong results in its dry grocery businesses were offset by weakness in the Jennie-O Turkey Store segment.

Net income in the quarter ended Jan. 27 rose 1% to $129,716,000, equal to 49c per share on the common stock, which compared with income of $128,395,000, or 49c per share, during the same quarter of the previous year. Sales for the quarter were $2,116,241,000, up 4% from $2,039,439,000 during the same quarter of the previous year.

“We continue to generate solid top-line momentum with many of our franchises as our broad portfolio of value-added products resonates with consumers,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. “In terms of operating profits, strong results by our Specialty Foods, Grocery Products and All Other (International) segments offset weaker results by our Jennie-O Turkey Store segment. Results in our Refrigerated Foods segment, while even with a year ago, were hindered by poor pork processing margins. Overall, earnings per share of 48c during the quarter were consistent with our expectations for the start of fiscal 2013.”

Operating profit for the Grocery Products segment was $49,913,000, up 13% from $44,093,000 during the same quarter of the previous year. Sales for the segment were $334,140,000, up 24% from $269,479,000.

The Refrigerated Foods segment had operating profit of $53,790,000, up slightly from $53,749,000 during the same quarter of the previous year. Sales for the segment were $1,063,401,000, down 2% from $1,083,525,000.

Operating profit within the Jennie-O Turkey Store segment fell 23% to $58,945,000 from $76,762,000, while sales for the segment decreased 3% to $390,334,000 from $377,371,000 during the same quarter of the previous year.

The Specialty Foods segment had an operating profit of $23,761,000, up 43% from $16,647,000 during the same quarter of the previous year. The segment had sales of $233,845,000, up 7% from $218,024,000.

The company said it expects full-year earnings per share to be in the range of $1.93 to $2.03 per share, up from a previous guidance of $1.90 to $2 per share.
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