Hormel Foods Corporation (
HRL
)
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
prior-year period.
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.
Outlook
Hormel maintained its full-year earnings guidance of $1.79 to
$1.89 per share, anticipating positive sales momentum and
value-added portfolio.
The company paid a dividend of 60 cents on August 15, 2012,
representing 336
th
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
competition from
ConAgra Foods Inc.
(
CAG
),
Kraft Foods Inc.
(
KFT
) and
Tyson Foods Inc.
(
TSN
).
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
Report
KRAFT FOODS INC (KFT): Free Stock Analysis
Report
TYSON FOODS A (TSN): Free Stock Analysis Report
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