Hormel Foods Corporation has announced a sales increase of 4% to US$1.4bn for the second quarter of 2006, with the company’s speciality foods operating profit jumping 55%, compared to the same period last year.
The food and meat manufacturer’s speciality division increased volume sales by 21%, including acquisitions, while sales were up 20% compared to the 2005 second quarter. Grocery products operating profit increased 8%, while refrigerated foods division operating profit was up 25%.
Hormel president and chief executive officer Jeffrey Ettinger said: “The specialty foods and all other segments continued their strong performance from the first quarter and the Grocery Products segment reported impressive growth in microwave tray items, Hormel bacon bits and the Spam family of products.”
The company posted net earnings of $67.3m, up 20% from earnings of $56m a year earlier. Diluted earnings per share for the quarter were $0.48 this year compared to $0.40 per share last year and sales totalled $1.4bn, up from $1.3bn in 2005.
For the six months ended 30 April 2006, net earnings increases 13% to $136.6m, or $0.98 per diluted share, compared to last year’s first half.
Ettinger said: “We delivered outstanding results in the second quarter despite the headwinds of a difficult protein environment and significantly higher energy costs.
“Our ability to deliver a 20% increase in earnings in light of these conditions is a testament to our continued focus on growing our value-added product lines and on combating cost pressures by achieving improved operating efficiencies in our plants and supply chain areas.
Hormel acquired canned ready-to-eat chicken supplier Valley Fresh , located in Turlock, California, during the second quarter.
“Valley Fresh has the leading market share in the canned ready-to-eat chicken category and is a great complement to our existing Hormel canned ready-to-eat line of chicken, ham and turkey products,” Ettinger added.
The company increased its GAAP earnings per share guidance for the full year from a range of $1.90-$2.00, to a range of $1.94-$2.04.