Hormel reports strong 3rd quarter
Published 9:44 am Friday, August 20, 2010
Hormel announced strong third quarter earnings this morning, with 11 percent net increased earnings and 10 percent increased sales revenue from last year.
“We are gratified by the continued strong sales growth, particularly in our branded and value-added product portfolios,” said Jeffrey Ettinger, president and chief executive officer, in a statement.
The company reported total earnings of $85.4 million — up from $77.2 million last year.
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Total sales for the company were up 10 percent from last year, marking a $1.7 billion sales year for Hormel. Diluted earnings per share for the fourth quarter were $0.63.
Good news surrounding Hormel’s third quarter earnings come on the heels of strong first and second quarter earnings.
The company’s Jennie-O Turkey Store’s operating profit skyrocket by 93 percent, despite flat sales.
“On the positive side, we expect Jennie-O Turkey Store to continue to substantially outperform,” Ettinger said.
Ettinger said while Jennie-O saw higher commodity meat prices and lower feed prices, the rise in profit was largely due to approved efficiencies.
The company’s refrigerated foods line, along with its specialty foods line, which includes products used for restaurants and health care facilities, both saw a rise in profits and monetary sales.
Refrigerated foods contributes to 55 percent of the company’s net sales and 44 percent of the total operating profits, carrying the weight for the company’s five major lines. Grocery products, the Jennie-O Turkey Store, specialty foods and others, which include foreign products, account for the company’s remaining sectors.
While grocery products operating profits were down 23 percent, the sector’s dollar sales increased by 12 percent.
“The majority of sales increases can be attributed to Mega Mix food products,” Ettinger said.
The refrigerated foods line saw a 12 percent sales jump from last year and 11 percent operating profit. Ettinger said the successful integration of cross marketing, specifically with Country Crock side dishes, carried the line’s success.
Specialty foods operating profits rose 19 percent, while total sales increased 12 percent.
This quarter, the company spent 1.8 percent for sales — up from 1.6 percent. Advertising expenses are expected to substantially exceed 2009 as it increases spending levels in the fourth quarter.
Adjusted net earnings for the company were $287.8 — up 20 percent from last year. Diluted adjusted net earnings per share were reported at $2.13, marking a 21 percent increase from last year.
The company’s reported net earnings — on a U.S. GAAP basis — were up 15 percent at $274.4 million. Diluted U.S. GAAP net earnings were also up 15 percent at $2.03.
Hormel Foods Corp., the maker of Spam and Dinty Moore meat products, said sales revenue rose 10 percent in the third quarter. Here’s a closer look at results.
Total sales revenue: Up 10 percent to $1.73 billion.
Revenue by category:
Grocery products: Up 13 percent to $235 million.
Refrigerated foods: Up 12 percent to $950.1 million.
Jennie-O Turkey Store: Flat at $295.9 million.
Specialty foods: Up 12 percent to $187.1 million.
Other revenue: Up 13 percent to $62.4 million.