US food company Hormel Foods has reported lower third-quarter profit, but said the outlook for the business was good going into the fourth quarter.
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The company posted net earnings of $51.4m, or 37 cents per share, for the fiscal third quarter, compared to $56.3m, or 40 cents per share, in the year-ago quarter, which included an $11.5m, or 8 cents per share, after-tax gain from the sale of Vista. After adjusting for this gain, earnings rose 15%.
Sales totalled $1.4bn, up from $1.2bn in the third quarter of fiscal 2004. Volume sales rose 22% compared to last year (up 4% excluding acquisitions/divestitures).
“Our turkey business delivered another outstanding quarter driven by continued value-added sales growth, lower grain markets and efficiencies in our production facilities. Impressive growth from several of our value-added products in Refrigerated Foods and key categories in the Grocery Products segment benefited the bottom line as well,” said Joel Johnson, chairman of the board and chief executive officer.
“The acquisitions that were completed earlier in the year are gaining momentum and made positive contributions also.
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By GlobalData“The year-over-year improvement in both the top and bottom line reported by the Grocery Products segment is encouraging. Two important areas of growth include the Hormel microwave line of products and the Spam family of products,” Johnson added.
“The outlook for our business looks good going into the fourth quarter. Even though last year’s fourth quarter included an extra week, solid performance from all segments should enable us to deliver improved results for the quarter compared to a year ago,” Johnson said.
The company’s earnings guidance for the fourth quarter of fiscal 2005 is in a range of 50 to 56 cents per share. For the full fiscal year 2005, Hormel narrowed its earnings guidance from $1.70 – $1.80 to $1.73 – $1.79.
