Hormel Foods Corporation
), a food company, posted adjusted earnings per share (excluding
one time charge on account of take-over of Skippy peanut butter
line) of 49 cents in the second quarter of fiscal 2013 (ended Apr
28, 2013), in line with the Zacks Consensus Estimate. Earnings
were a penny higher than the year-ago quarter.
However, taking into consideration the Skippy peanut butter
acquisition costs, the earnings per share for the reported
quarter were 46 cents.
Hormel's net sales for the reported quarter were $2,152.7
million, up 6.9% year over year; but lagged slightly behind the
Zacks Consensus Estimate of $2,173.0 million. The year-over-year
increase was mainly led by the Grocery Products segment, where
the sales of Skippy peanut butter line were registered. Also, the
total volume was up by 4.0%.
During the reported quarter, revenue from Grocery Products
improved 49.1% year over year to $393.5 million, while Jennie-O
Turkey Store witnessed a revenue fall of 1.6% to $384.7 million.
The Refrigerated Foods segment registered a decline of 2.0% in
revenue to stand at $1,011.4 million. On the other hand,
Specialty Foods revenue swelled 7.3% to $245.7 million while
revenue from International & Other segment crept up 21.1% to
$117.4 million during the reported quarter.
Hormel's gross profit for the second quarter of fiscal 2013 was
$352.8 million, up 5.1% from $335.6 million in the comparable
quarter last year. Operating profit margin in the quarter
decreased 99 basis points year over year to 8.7%, due to an
increase in the acquisition costs.
Operating profit for Grocery Products for the reported quarter
increased 10.4% while Jennie-O Turkey Store registered a decline
of 25.9% year over year. Operating profit for Specialty Foods
jumped 24.5%. International & Other segment's profit surged
21.5% year over year. Operating profit for the Refrigerated Foods
segment increased 3.2% in the quarter.
At the end of the reported quarter, the company recorded cash and
cash equivalents of $262.7 million, down from $887.7 million at
the end of the preceding quarter. Long-term debt (less current
maturities) stood at $250.0 million at the end of the quarter,
flat compared with the preceding quarter.
The company paid a dividend of 68 cents per share on May 15,
2013, representing 339th straight dividend payout by the
Management expects Grocery Products and International & Other
segments to continue prospering in the coming quarters, with a
contribution from the Skippy peanut butter line. However,
Specialty Foods segment is likely to lose business in the latter
half of fiscal 2013. Refrigerated Foods segment, which is going
through difficult times at present, is expected to improve in the
future. Jennie-O Turkey Store segment will continue to face
headwinds. Based on these factors, Hormel maintains its earnings
estimates for fiscal 2013 in the range of $1.93-$2.03.
Hormel currently holds a Zacks Rank #2 (Buy). Other stocks
worth considering in the food industry are
Sanderson Farms Inc.
Pilgrim's Pride Corporation
); each carrying a Zacks Rank #1 (Strong Buy). Also,
) carries a Zacks Rank #2 (Buy).
ANNIES INC (BNNY): Free Stock Analysis Report
HORMEL FOODS CP (HRL): Free Stock Analysis
PILGRIMS PRIDE (PPC): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
To read this article on Zacks.com click here.