Hormel Foods Corp.
) is set to report its third-quarter 2012 results on Thursday, May
The current Zacks Consensus Estimate is pegged at 41 cents,
representing an annualized growth of 12.5%.
With respect to earnings surprises, HRL has outperformed the
Zacks Consensus Estimate in three of the last four quarters and was
in line in the other. Average earnings surprise stood at
7.44%, implying that the company has surpassed the Zacks Consensus
Estimate by the same magnitude over the last four quarters.
Second Quarter 2012 Highlights
On May 23, Hormel Foods Corporation posted second-quarter 2012
financial results with earnings per share of 48 cents, surpassing
the Zacks Consensus Estimate of 42 cents. The quarter's earnings
also spiked 20% from 40 cents earnings per share in the prior-year
Net earnings came in at $127.9 million compared with $109.6
million in the second quarter of 2011.
Net sales for the second quarter of 2012 were $2,012.9 million,
up 2.7% year over year but slightly lower than the Zacks Consensus
Estimate of $2,035 million. The year-over-year increase was driven
by the sales gain across four of the company's five segments.
Export sales across international business also contributed to
Agreement of Estimate Revisions
In the last 30 days, none of the analysts increased or decreased
the company's earnings per share estimates for the third quarter of
2012, given the lack of catalysts. Also, for 2012, none of the
analysts increased or decreased their estimate, and followed a
similar trend for 2013.
Magnitude of Estimate Revisions
Estimates over the last 30 days increased slightly from 40 cents
to 41 cents per share for the third quarter of 2012.
Estimate for 2012 remained static at $1.85 over the last 30 days
while that for 2013 showed a similar trend and stood at $1.95.
These estimates represented a year-over-year growth of 6.45% and
5.48% for 2012 and 2013, respectively.
We expect positive sales momentum and rise in EPS for the third
quarter of 2012. Weare optimistic on the company's continuously
improving operational efficiencies and pricing strategy, which has
been positioning Hormel above its peers.
The company faces stiff competition from
ConAgra Foods Inc
Kraft Foods Inc.
Tyson Foods Inc.
We currently maintain a long-term Neutral recommendation on the
stock. Hormel has a Zacks #4 Rank, which translates into a
short-term (1-3 months) 'Sell' rating.
CONAGRA FOODS (CAG): Free Stock Analysis Report
HORMEL FOODS CP (HRL): Free Stock Analysis
KRAFT FOODS INC (KFT): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis Report
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