Hormel earnings up 14 percent

Published 4:07 pm Thursday, May 22, 2008

Austin-based Hormel Foods Corporation this morning announced its quarterly earnings jumped 14 percent despite lackluster performance by its Jennie-O Turkey Store division.

Hormel Foods earned 56 cents per share in the second quarter, up from 49 cents per share for the same quarter in 2007. Total sales for the company increased 6 percent from 2007, to $1.6 billion.

“It was a solid quarter for Hormel Foods,” chief executive Jeffrey Ettinger said in a release. “We were able to meet our company objectives for sales and earnings growth in the second quarter amidst a challenging operating environment.”

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That challenging operating environment included grain costs for Jennie-O Turkey Store, which contributed to a 16 percent decline in profit for the division despite an 8 percent increase in sales. Grain-related costs were $39 million higher over a year ago.

The specialty foods segment also reported lower operating profits, down 5 percent over a year ago.

All other segments, however, fared well.

“Our refrigerated foods segment led the way, as lower pork input costs combined with increased sales of value-added products provided a significant increase in earnings,” Ettinger said. “Our grocery products segment also delivered higher than expected sales and earnings, aided by strong sales of the Spam family of products and continued growth of the Hormel Compleats product line.”

The company reported fiscal 2008 second quarter net earnings of $77.6 million, up 14 percent from earnings of $68 million last year. For the six months ending April 27, net earnings were $165.7 million, compared to $143.3 million last year, with sales totaling $3.22 billion, up 7 percent from $3.01 billion last year.