Hormel 2Q profit rises, stimulates the year outlook

PORTLAND, Oregon - profit in the second quarter of Hormel Foods Corp. rose by 41 percent on the strong performance of its chilled food and his company Turkey Jennie-O, while higher products cut in its other lines.

The company, based in Austin, Minnesota, raised prospects of income for the year Wednesday based on the results.

Hormel, like many food manufacturers, out with higher on everything from grain to fuel and raised its price to offset this pressure. The company said it expected to face charges higher for the rest of the year and will continue to raise prices and reduce the costs to maintain profitability.

"We believe that our strong portfolio of brands and our balanced model will help to overcome these barriers," said CEO Jeffrey Ettinger.

Hormel earned establishment million, or 40 cents per share, for the quarter ended May 1. That is $ 77.9 million, or 29 cents per share, a year ago. Analysts expected a slightly higher to 41 cents per share, according to the value is.

Income increased 15 percent from $ 1.96 billion, beating the analysts predicted $ 1.82 billion.

Hormel made gains on both volume growth price increases and sales. The company food refrigerated, which represents more than half of its revenues, was one of its best performers. Income increased by 17% as shoppers bought more Hormel party trays and Deli meats. Jennie-O revenues increased 25 percent, helped by stronger price reductions and markets meat products.

The company has struggled more grocery, where revenue increased only 1.4%. Similar Span and Dinty Moore stew products sales were strong, while microwave products and imported canned meats are lower. The profitability of this segment fell to the higher cost of entry.

Similarly, revenues of specialty food increased more modest 4 percent, while operating profit was hampered by higher raw material.

Hormel now expected income net of the exercise of $ 1.67 to $ 1.73 per share, up from prior guidance of $1.62 $ 1.68 per share. Analysts expect $1.71 per share.

However, investors were concerned about the ability of Hormel to support this kind of growth in view of the volatility of the prices of raw materials. Standard & Poor Equity Research has lowered its opinion on the actions of Hormel to "Sell" from "Hold", saying: it has increased concerns about the pressures of profitability on the pork and the Hormel Turkey businessdin light of changes in the prices of cereals.

CEO of Hormel Jeff Ettinger, said society has been able to adjust prices to response to these changes, but like the rest of the industry, to a certain degree of uncertainty in commodities. But he remains focused on the engines of growth in the long term as the expansion of product lines, production and popular with shoppers.

Hormel shares fell $2.31, about 8%, to $27.71 in morning trade.