US meat products producer Hormel Foods has posted a 9% drop in third-quarter earnings, mainly due to a glut in the turkey market.
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Austin, Minnesota-based Hormel posted profit of US$34.7m, or 25 cents a share, for the quarter to 26 July, compared to $38.3m, or 27 cent a share, a year earlier. Analysts had been expecting, on average, earnings of 27 cents a share, reported Reuters.
“The normal seasonal strengthening of the turkey market did not happen this year because of excess inventory industrywide,” said Hormel chief executive Joel Johnson was quoted as saying by Reuters.
The company was also hit by higher hog costs, partly due to fewer hogs on US farms.
Third-quarter sales rose 8.1% to $1.01bn, helped by the acquisition of Century Foods International, which more than doubled sales in Hormel’s specialty foods division to $78.8m.
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By GlobalDataHormel, which also makes Spam luncheon meat, forecast fourth-quarter earnings below analysts’ expectations. The company said it expects earnings of between 36 cents and 44 cents a share for the fourth quarter, compared to analysts’ expectations of 52 cents a share.
