Hormel credits value-added products

Hormel credits value-added products

- Challenges in hog and turkey production will "gradually diminish." - Hormel increases exports of fresh pork. - Skippy being integrat

HORMEL Foods Corp. has reported an increase in earnings and sales for its fiscal 2013 first quarter, attributing its performance to "a broad portfolio of value-added products that resonate with consumers."

The company's results are shown in the Tables.

For its grocery products segment, Hormel said earnings and sales were driven by growth in the SPAM family of products, Hormel chili and Mary Kitchen hash and the introduction of Compleats Cheesy Pasta to the line of Compleats microwave meals.

Hormel noted that it closed on its acquisition of Skippy peanut butter at the beginning of February (Feedstuffs, Feb. 11) and is now integrating Skippy into its grocery and international segments. The company said it anticipates recording acquisition and transition costs in its fiscal second quarter, after which Skippy should begin providing accretion benefits.

For its refrigerated foods segment, which is basically the meat products business, Hormel said flat to lower results were a consequence of increased costs in hog production and poor pork pricing that offset improvements in value-added products such as Hormel pepperoni and Hormel Natural Choice deli meats.

The company said it expects hog production and pork results "to improve slowly."

For its Jennie-O Turkey Store segment, Hormel said decreased profitability reflected high corn and other production costs and weak turkey pricing that more than offset improved sales of value-added products such as fresh tray packs, turkey bacon and turkey franks.

The company said its expects challenges facing the turkey business to continue for the near term "and then to gradually diminish."

For its specialty foods segment, Hormel said results were "impressive" and were led by Hormel Health Labs products, private-label canned meats and savory ingredients.

For its other segment, which is mostly the international operations, Hormel said results were due primarily to greater exports of fresh pork and improved operations in China.

The company also announced that it paid a dividend of 68 cents per share -- its 338th consecutive dividend -- on Feb. 15.

Hormel, headquartered in Austin, Minn., is the fifth-largest pork processor and second-largest turkey grower and processor in the U.S. It reported fiscal 2012 sales of $8.2 billion.

 

1. Hormel Foods earnings and sales*

 

-First quarter-

 

2013

2012

Sales (billion $)

2.116

2.039

Earnings (million $)

129.7

128.4

Earnings per share (cents)

48

48

 

2. Hormel operating results (million $)*

 

-First quarter-

Sales

2013

2012

Grocery products

334.1

269.5

Refrigerated foods

1,063.4

1,083.5

Jennie-O Turkey Store

390.3

377.4

Specialty foods

233.6

218.0

Other

94.5

91.0

Income

 

 

Grocery products

49.9

44.1

Refrigerated foods

53.8

53.7

Jennie-O Turkey Store

58.9

76.8

Specialty foods

23.8

16.6

Other

17.1

12.5

*For the quarters ended Jan. 27, 2013, and Jan. 29, 2012.

 

Volume:85 Issue:10

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