Jennie-O Turkey business, acquisition costs weigh on Hormel results

by 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% 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 47c per share on the common stock, which compared with income of $127,887,000, or 49c per share, during the same quarter of the previous year. Sales for the quarter were $2,152,686,000, up 7% 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 M. 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% from $42,858,000 during the same quarter of the previous year. Sales for the segment were $393,505,000, up 49% from $263,993,000.

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

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

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