US: Hormel Q4 earnings drop but 2012 forecast cheers investors
Hormel 2012 earnings forecast was above Wall Street estimates
Shares in Hormel Foods climbed today (22 November) after the US food maker's lower quarterly profits beat analyst expectations - and its forecast for 2012 earnings was above Wall Street targets.
The Spam maker reported fourth-quarter net profit of US$117.3m for the three months to 30 October, down from $121.1m a year earlier.
Operating income dropped 3% to $186.7m as input costs weighed on Hormel's refrigerated foods arm, which includes its eponymous bacon and Hormel Natural Choice deli meats and pizza toppings.
The company pushed up prices to try to offset the impact of the higher commodity costs, which improved sales by 2% to $2.1bn. Volumes fell 7%.
Diluted earnings per share were $0.43 compared to $0.45 in the previous year's fourth quarter but above analysts forecasts of $0.42, according to a Thomson Reuters poll.
The better-than-expected EPS helped Hormel's shares, which were up 1.28% at $29.20 at 13:18 ET. The company forecast earnings per share of $1.79-1.89 for the 2011/12 financial year, above an analyst consensus forecast of $1.77, Thomson Reuters said.
Chairman, president and CEO Jeffrey Ettinger said Hormel expected sales and earnings to grow in its new financial year. "In particular, we are looking for our grocery products, speciality foods and all other - [or] international - units to drive profit growth in fiscal 2012, as our refrigerated foods and Jennie-O Turkey Store segments maintain their position against historically high results," he said. "We also anticipate the comparisons to be more difficult in the first half of the year, becoming more favourable later in the year."
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