Hormel Foods Earns 67 Cents per Share

Good earnings for Hormel Foods (HRL). The company just reported fiscal Q2 earnings of 67 cents per share which was four cents per share more than estimates. That’s also 29% over last year’s Q2 earnings. Revenues climbed 1.5% to $2.28 billion which was below Wall Street’s estimates of $2.39 billion.

“We achieved record second quarter earnings and sales, driving double-digit earnings growth with all five segments delivering increases,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

“Although declining pork markets drove lower pricing and net sales this quarter, Refrigerated Foods increased operating profit by 52 percent with strong sales growth of foodservice and retail value-added products,” commented Ettinger. “Jennie-O Turkey Store entered the quarter with excellent momentum and drove robust sales and earnings gains, but exited the quarter with substantial supply chain challenges brought on by avian influenza. Grocery Products benefited from input cost relief and growth of our SPAM® family of products, while the export business in our International segment continued to be challenged by port issues and the strong U.S. dollar,” commented Ettinger. “Specialty Foods delivered earnings growth as the team continues to achieve synergies with the recently acquired CytoSport business.”

Hormel acknowledges that avian flu will be an issue for them, but they’re sticking by their full-year guidance of $2.50 to $2.60 per share. They’ve already made $1.30 per share for the first half of this fiscal year.

“While we enjoyed an excellent first half, we expect Jennie-O Turkey Store to be significantly challenged going forward due to the impacts of avian influenza on our turkey supply chain,” commented Ettinger. “Refrigerated Foods and Grocery Products will continue to benefit from value-added product growth and lower pork input costs. Specialty Foods is positioned to deliver substantial earnings increases in the back half with the CytoSport business. Taking these factors into consideration, we are maintaining our 2015 non-GAAP earnings guidance at the lower end of our previously stated $2.50 to $2.60 per share range.”

The stock has been up as much as 5.7% today.

Posted by on May 20th, 2015 at 10:47 am


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