Hormel Foods 4Q net income falls, revenue rises

[November 22, 2011]  AUSTIN, Minn. (AP) -- Hormel Foods Corp.'s fiscal fourth-quarter profit slipped 3 percent as sales at its grocery products segment declined. The performance still topped Wall Street's view and the food company gave earnings guidance for 2012 above analysts' expectations.

The maker of Spam, Dinty Moore stew and other prepared foods reported Tuesday that its net income fell to $117.3 million, or 43 cents per share, for the period ended Oct. 30. That's down from $121.1 million, or 45 cents per share, a year earlier.

The results still beat the 42 cents per share that analysts surveyed by FactSet forecast. Its earnings per share were adjusted to account for a previously announced 2-for-1 stock split.

There was also one less week in the current quarter.

Revenue edged up 2 percent to $2.1 billion from $2.06 billion but missed Wall Street's $2.13 billion estimate.

Sales for the grocery products division dipped 2 percent.

But the company's remaining segments reported sales increases. The biggest gain was in a segment mostly comprised of Hormel Foods International, which reported a 12 percent sales increase. The company said the unit's results were mostly driven by better fresh pork exports.

Sales for the specialty foods unit rose 10 percent, while Jennie-O Turkey Stores sales gained 2 percent. The refrigerated foods division posted a 1 percent sales increase, helped by sales of Hormel convenience bacon and Hormel Cure 81 hams in the Meat products group and Hormel Natural Choice deli meats and pizza toppings in the Foodservice group.

Hormel's full-year earnings rose 20 percent to $474.2 million, or $1.74 per share, from $395.6 million, or $1.46 per share, in the prior year. Annual revenue increased 9 percent to $7.9 billion from $7.22 billion.

The Austin, Minn. company anticipates 2012 earnings in a range of $1.79 to $1.89 per share. Analysts expect earnings of $1.77 per share for the year.

Chairman, President and CEO Jeffrey Ettinger said in a statement that Hormel expects its grocery products, specialty foods and the division with the international business to drive its fiscal 2012 profit growth. He cautioned that comparisons will likely be more difficult in the first half of the year, getting more favorable later in the year.

Late Monday, Hormel increased its annual dividend by 18 percent to 60 cents per share from 51 cents per share.

[Associated Press]

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