Archived Story

Hormel report 17 percent earnings increase

Published 7:25am Wednesday, May 23, 2012

AUSTIN — After two quarters of decline, Hormel Foods Corp. rebounded with a 17 percent net earnings increase and a 3 percent increase in total sales for the second quarter of fiscal 2012 led by Jennio-O Turkey.

In a report released today, Hormel recorded net earnings of $127.9 million for the second quarter, a substantial jump from $109.6 million a year earlier. For the six months ended April 29, net earnings were $256.3 million, down 1 percent from net earnings of $258.4 million the same period last year.

Sales for the quarter were $2.01 billion, up from $1.96 billion in fiscal 2011. For the six months ended April 29, 2012, sales totaled $4.1 billion, up 4 percent from the same period last year.

Diluted net earnings per share for the six months ended April 29, 2012 were $.95, equal to diluted net earnings per share of $.95 last year.

“We are pleased to report record earnings and sales for the second quarter,” said Hormel CEO and President Jeff Ettinger in a news release today. “This is a good example of our balanced business model in action, as we were able to increase earnings in four out of five segments.”

Jennie-O — which accounts for 20 percent of Hormel’s net sales — had an excellent quarter, with segment operating profit up 50 percent from a year ago. Jennie-O’s net sales for the quarter rose 7 percent, led by sales of Jennie-O retail tray packs and turkey burgers.

“Our Jennie-O Turkey Store segment delivered another outstanding quarter, driven by value-added sales growth,” Ettinger said in the release.

Hormel reported a 14 percent decrease in net earnings last quarter and a 3 percent drop in the fourth quarter of last year. Still, the company continues on an upward trend. While the first quarter earnings were below the first quarter of 2011, it was still the second best in the company’s history. And before those two quarters, Hormel reported 10-consecutive quarters growth.

“Our second quarter results provide positive momentum heading into the back half of the year,” Ettinger said in the release. “We believe continued weaker pork operating margins will be more than offset by stronger results from our other segments. We expect sales in the center of the store to slowly improve as we continue our advertising support of our Hormel and Spam brands.”

Ettinger said the company is maintaining its full-year earnings guidance range of $1.79 to $1.89 per share.