Hormel Sees Earnings Rise24 August 2012
US - US meat processing giant Hormel Foods has reported net earnings of $111.2 million for the third quarter of the financial year, up 13 per cent from $98.5 million a year earlier.
For the nine months ended 29 July, net earnings were $367.4 million, up three per cent from net earnings of $356.9 million the same period last year.
Diluted net earnings per share for the nine months were $1.37, up five per cent from diluted net earnings per share of $1.31 last year.
Sales for the quarter were $2.0 billion, up five per cent from the same period in fiscal 2011 and for the nine months ended, sales totalled $6.1 billion, up five per cent from the same period last year.
“We had an excellent quarter, with earnings per share and sales up 14 per cent and five per cent, respectively,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.
“All five segments reported increased earnings, led by our Grocery Products segment. Our strong sales growth across multiple segments demonstrates that our products are connecting well with consumers.
“Our Grocery Products segment benefitted from strong sales of our SPAM family of products and from our MegaMex Foods joint venture.
"I was also pleased to see sales of our HORMEL COMPLEATS microwave meals grow nicely in the quarter. Our Jennie-O Turkey Store segment delivered another good quarter, aided by increased value-added sales and an improved product mix.
"Our international business continues to achieve impressive results, led by strong export sales of our SPAM family of products and fresh pork.
"Increased value-added sales offset lower pork operating margins, boosting our Refrigerated Foods segment results during the quarter. Our Specialty Foods team generated excellent results on higher sales during the quarter,” Mr Ettinger added.
Grocery Products segment profit increased by 32 per cent, led by improved sales of the SPAM family of products and by the MegaMex Foods joint venture. Net sales increased over last year’s results by 21 percent, including sales of DON MIGUEL® products. Without those sales, sales increased by three per cent.
Refrigerated Foods segment profit improved by seven per cent, as stronger results by our Meat Products and Foodservice businesses were able to offset lower pork operating margins.
While net sales for the quarter were flat, value-added sales increased, including sales of HORMEL NATURAL CHOICE deli meats, HORMEL party trays, HORMEL bacon and HORMEL pepperoni.
Jennie-O Turkey Store delivered another solid quarter, with segment operating profit up 12 per cent from a year ago.
Increased value-added sales and an improved product mix offset higher feed costs and lower commodity meat prices. Net sales for the quarter rose seven per cent, led by sales of JENNIE-O TURKEY STORE fresh tray pack products and turkey burgers.
Specialty Foods segment profit increased 18 percent, as all three business units registered gains. Net sales grew by 11 per cent, led by higher sales of bulk and nutritional items, private label canned meats and ingredients.
The All Other segment, which consists primarily of Hormel Foods International, grew segment profit by 55 per cent and net sales by two per cent, driven principally by stronger exports of the company's SPAM family of products and fresh pork.
“Our excellent results in the third quarter give us momentum heading into the fourth quarter and put us on track to achieve results consistent with our annual guidance range of $1.79 to $1.89 per share,” Mr Ettinger said.
“Increased grain costs will present a challenge, but the strength of our balanced business model and the vibrancy of our branded, value-added portfolio should support continued sales and earnings growth as we close out fiscal 2012.”