Hormel Foods revealed yesterday (22 November) that its fourth quarter earnings increased by 10% to US$90m, up from $82.2m posted a year earlier. Diluted EPS for the quarter was $0.64, compared to $0.59 in the comparable quarter of last year.
The maker of Spam canned meat and Jennie-O Turkey said sales totalled $1.56bn, up from $1.48bn in the fourth quarter of fiscal 2005, on volume growth of 5% (or 4.5% excluding acquisitions.) Revenue rose 5.4 percent to $1.56bn from $1.48bn a year ago.
Hormel’s speciality food unit boosted operating profit by 81% to $15m, benefiting from the 2003 purchase of Century Foods, a maker of nutrition bars and protein beverages, and the 2002 acquisition of Diamond Crystal. The gain more than offset a 12% decline in profit from Jennie-O Turkey products.
“The combination of very good execution by our employees and the strength of our product portfolio provided a strong finish to a great year,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. “Our Specialty Foods segment was the clear standout, delivering an 81% increase in operating profit for the quarter and 78% increase for the year,” Ettinger continued.
For the full year, Hormel said it earned $286.1m, or $2.05 per share, up 12% from $254.6m, or $1.82 per share, a year earlier. Revenue rose 6% to $5.75bn from $5.4bn.
Hormel said it expects to report earnings per share of $0.52 to $0.58 during the first quarter of fiscal 2007 and $2.15 to $2.25 per share for the full year.
“As we look forward to 2007, we are cautiously optimistic. While we anticipate higher grain costs to be a burden in our turkey operation, we believe that our value-added initiatives will more than offset this extra expense. We will continue our leadership role as an innovator in the food industry and we are excited about the growth prospects for our business,” Ettinger concluded.