Hormel Profits Decrease, Sales Up

Aug. 25–Hormel Food Corp.’s third quarter report showed a decrease in its quarterly profits from last year’s third quarter.

But sales figures increased with the help of refrigerated foods and turkey products.

Profit declined 9 percent to $51.4 million, or 37 cents a share. That compares to $56.3 million, or 40 cents a share, a year earlier. But those earnings last year were boosted by a one-time, after-tax gain of $11.5 million, or 8 cents a share, from the sale of Hormel’s Vista International Packaging Inc. subsidiary. If that transaction were disregarded in the comparison, Hormel would have shown a 15 percent increase in IIn the third quarter, the company reported sales of $1.4 billion, up from the $1.2 billion last year.

Compared to adjusted figures the increase was 17 percent.

Refrigerated foods and turkey products turned out to be the company’s leading segments.

Although operating profit was down 17 percent for refrigerated products, volume increased 39 percent and dollar sales went up28 percent.

The company’s turkey segment had an “outstanding” quarter thanks to value-added sales growth, slower grain markets, and efficiencies in production facilities, according to Joel Johnson, chairman of the board and Hormel’s chief executive officer.

Operating profit for the turkey segment totaled $27 million, compared to $8 million last year.

“Impressive growth from several of our value-added products in refrigerated foods, and key categories in the grocery products segment benefited the bottom line as well,” Johnson said in a prepared statement.

Last year’s weakest segment, the grocery products showed some “encouraging” improvements, with an 8 percent increase in operating profit.

This year’s third quarter also got a boost from the company’s four latest buys: Farmer John, Mexican Accent, Mark-Lynn Foods and Lloyd’s Barbecue Company.

“We are very pleased the way these businesses fit into the Hormel Foods organization and the contributions they made in the quarter,” Johnson said in the company’s statement.

The company is projecting next quarter profits in a range of $.50 to $.56 per share.

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