US food company Hormel Foods has reported a 6.8% fall in first-quarter net income to US$46.9m.

The company posted net sales for the quarter to 25 January of $1.02bn, up 3.6% year-on-year.

Hormel said its refrigerated-foods unit continued to see profitability challenges from a worldwide glut of meat on the market, as well as contract prices for hogs that continued to exceed open market prices. The company said this problem was partially offset by positive results from its foodservice operation and margin contributions from other products.

Hormel said it expects US protein and commodity markets to gradually return to normal levels in the second half of fiscal 2003, reported Dow Jones Business News.