Packaged foods giant Hormel Foods Corporation ( HRL
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.
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