Hormel Foods Corporation (
posted earnings per share of 41 cents in the third quarter of 2012,
in line with the Zacks Consensus Estimate. The quarter's earnings
also increased 14% from 36 cents per share reported in the
Net earnings reached $111.2 million, up from $98.5 million in
the third quarter of 2011.
Net sales for the reported quarter were $2,008.2 million, up
5.1% year over year and ahead of the Zacks Consensus Estimate of
$1,994 million. The year-over-year increase reflected sales gain
across four of the company's five segments.
During the reported quarter, revenue from Grocery Products
improved 21.1% year over year and Jennie-O Turkey Store witnessed
revenue growth of 7.3%. However, the Refrigerated Foods segment
registered a decline of 0.2% in revenue annually based on lower
pork operating margins. On the other hand, Specialty Foods revenue
increased 11.1% while revenue from all other items crept up 1.8%
during the reported quarter.
Operating profit for Grocery Products for the reported quarter
increased 31.6% while Refrigerated Foods registered a rise of 6.9%
year over year. Operating profit for Jennie-O Turkey Store jumped
12.2%, led by higher retail value-added sales. Specialty Foods
surged 18.5% year over year.
Gross profit for the third quarter of 2012 was $307.1 million,
up from $297.9 million in the comparable quarter last year.
Selling, general and administrative (SG&A) expenses were down
7.4% year over year to $145.0 million in the quarter.
Exiting the third quarter, net cash provided by operating
activities was recorded at $284.1 million compared with $319.4
million in the year-ago quarter. At the end of the reported
quarter, the company recorded cash and cash equivalents of $533.2
million, up from $497.4 million at the end of the comparable
quarter last year. Long-term debt (less current maturities) stood
at $250 million at the end of the quarter.
Hormel maintained its full-year earnings guidance of $1.79 to
$1.89 per share, anticipating positive sales momentum and
The company paid a dividend of 60 cents on August 15, 2012,
straight dividend payout by the company.
Based in Austin, Minnesota, Hormel Foods Corporation is a
leading manufacturer and marketer of various meat and food products
in the United States and internationally. The company faces stiff
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.
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