Hormel Foods Raises Outlook; Q2 Profit Falls on Charges, but Beats View (HRL)

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Packaged foods giant Hormel Foods Corporation ( HRL ) on Wednesday posted better-than-expected second quarter earnings, and raised its full-year forecast amid higher sales.

The Austin, MN-based company reported second quarter net income of $77.9 million, or 57 cents per share, compared with $80.4 million, or 59 cents per share, in the year-ago period. Excluding one-time items, adjusted profit was 67 cents per share.

On average, Wall Street analysts expected a smaller adjusted profit of 61 cents per share.

Sales jumped 7% from last year, to $1.7 billion, as volumes rose 2%.

Looking ahead, the company boosted its full-year outlook to a range of $2.75 to $2.85 per share, up from a prior view of $2.68 to $2.78. Analysts currently expect $2.75 per share for the year.

Still, Hormel Foods shares fell $1.28, or -3.1%, in premarket trading Wednesday.

The Bottom Line
We have been avoiding shares of HRL since our early June 2008 coverage began, when shares were trading near $40 a share. The company has a 2.01% dividend yield, based on last night's closing price of $41.78. The stock has technical support in the $38 price area. If the shares can firm up, we see overhead resistance around the $43 price level. We would remain on the sidelines for now.

Hormel Foods Corporation ( HRL ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Created by Dividend.com

This article appears in: Investing , Stocks

Referenced Stocks: HRL



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