Hormel Foods Corp. today reported its third quarter net earnings at $77.2 million, up 49 percent from $51.9 million in 2008.

Sales totaled $1.6 billion, which were down 6 percent from fiscal 2008. For the nine months ending July 26, 2009, net earnings were $238.9 million, or $1.76 per diluted share, up from $1.58 a year earlier. Sales totaled $4.9 billion, which are even with last year. Diluted earnings per share for the quarter were $.57 this year compared to $.38 per share last year.

Refrigerated foods and Jennie-O Turkey Store reported improvements, and grocery products also had a strong quarter.

“We are pleased to report improved operating segment results for the quarter,” said Jeffrey M. Ettinger, chairman of the board, president and CEO. “Our refrigerated foods segment rebounded to post higher earnings on an enhanced sales mix and lower costs, despite weak cutout margins during much of the quarter. Our Jennie-O Turkey Store segment also showed continued improvement in the quarter.

“Our grocery products segment had another solid quarter, as increased sales of canned items more than offset the impact of discontinued sales of olive oil and soft sales of microwave products,” Ettinger said. “Our specialty foods and all other segments had weaker results.

“Sales and volumes were down overall, as we made intentional reductions to our turkey production and the effects of the economy took their toll on certain portions of the business,” Ettinger said.

Segment operating highlights from the third quarter are:

 Grocery products (13 percent of net sales, 26 percent of total segment operating profit)

The grocery products segment reported another good quarter with segment operating profit up 11 percent. Strong sales of the Spam family of products, Hormel chili and Herdez products more than offset the impact of soft sales of our microwaveable products. Excluding sales of the recently discontinued Carapelli joint venture products, net sales for the grocery products segment were even with last year.

 Refrigerated foods (54 percent of net sales, 45 percent of total segment operating profit)

The refrigerated foods segment completed an outstanding quarter, with segment operating profits up 60 percent from last year, when primal values were exceptionally high, due to strong export demand. Sales of our retail value-added offerings such as Hormel Pepperoni, Hormel Party Trays and the DiLusso Deli Co. products more than offset the impact of a challenging pork environment. Foodservice sales continued to be soft, reflecting a weak travel and recreation environment and a continued decline in the restaurant trade.

Jennie-O Turkey Store (19 percent of net sales, 12 percent of total segment operating profit)

Total segment operating profit for Jennie-O Turkey Store improved 97 percent from last year’s tough third quarter. Lower feed expenditures due to the planned reduction of turkey production and a reduced cost per ton, were the primary drivers of the improved profitability. The reduced production helped offset the continued challenge of low commodity meat prices, by reducing our exposure to those markets.

 Specialty foods (11 percent of Net Sales, 13 percent of total segment operating profit)

Segment operating profit for specialty foods was down 2 percent, reflecting mixed results within the segment. Diamond Crystal Brands showed improved results due to strong sales of nutritional products. However, these results were not sufficient to overcome weak sales of nutritional and ready-to-drink products at Century Foods International.

 All other (3 percent of net sales, 4 percent of total segment operating profit)

The all other segment, which includes Hormel Foods International, experienced a 19 percent decline in segment operating profit. Continued currency headwinds and difficult export markets led to the weaker results.

 Net interest and investment income

Net interest and investment income for the quarter was significantly improved versus last year due primarily to more favorable returns on the rabbi trust investments.

General corporate expense

General corporate expenses increased from last year due to higher medical expenses and increased employee incentive plan costs.

“As a result of our strong third quarter results, we anticipate full year results in our recently announced range of $2.36 to $2.42 per share,” Ettinger said. “Although we are faced with challenges including the weak economy, a continued excess supply of commodity turkey meat, and difficult export markets, our balanced business model, continued strength in our core franchise products, and our very committed team should allow us to deliver an excellent year.”

Effective July 15, the company paid its 324th consecutive quarterly dividend. The annual rate is 76 cents.