Shares in Hormel Foods dropped despite today’s announcement (25 August) of an increase in third-quarter profits and an improved forecast for annual earnings.
As of 11.41 ET, shares in the US company, which makes Spam and owns the Jennie-O turkey business, were down nearly 5.5%.
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The fall in its stock came despite third-quarter operating profit of US$148m, compared to $145m in the same period last year. Net profit was $99.9m, compared to $86.3m a year earlier.
Hormel also increased dollar sales 10% to $1.9bn in the period up to 31 July but volumes were flat.
Chairman, president and CEO Jeffrey Ettinger said: “Earnings growth was led by our Grocery Products and Jennie-O Turkey Store segments, both of which had a strong quarter. Our international business in our All Other segment was also a strong contributor to our earnings results.”
Ettinger added: “Lower pork operating margins hindered our Refrigerated Foods segment results and our Specialty Foods segment was pressured by higher than expected raw material costs during the quarter.”
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By GlobalDataHowever, commenting on the outlook for the rest of the year, Ettinger added: “As a result of our solid results in the third quarter, we are raising our full-year guidance range to $1.70 to $1.75 per share from $1.67 to $1.73 per share.”
