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Hormel Reports Rise in Earnings

by 5m Editor
23 November 2007, at 1:27pm

US - US pork processing company Hormel has reported fourth quarter net earnings of $101.2 million, up 12 percent from earnings of $90.0 million a year earlier.

Included in this year’s quarterly results are a $4.8 million pre-tax gain from the sale of a company airplane and a $2.0 million pre-tax gain from the disposition of the Patak’s joint venture. Diluted earnings per share for the quarter were $.73 this year compared to $.64 per share last year and sales totaled $1.66 billion, up from $1.56 billion in fiscal 2006.

For the 12 months ended October 28, 2007, net earnings were $301.9 million, or $2.17 per diluted share (up 6 percent), compared to $286.1 million a year ago, or $2.05 per diluted share. Included in this year’s annual results are a $4.8 million pre-tax gain from the sale of a company airplane and a $2.0 million pre-tax gain from the disposition of the Patak’s joint venture. Sales totaled $6.19 billion, up 8 percent, from $5.75 billion in the same period last year.

“We were pleased to end the year with a strong finish that allowed us to deliver respectable full year results in a challenging environment. The strength of the fourth quarter’s results provides good momentum heading into fiscal 2008,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

“I was encouraged to see that despite significantly higher grain markets, Jennie-O Turkey Store increased year-over-year segment profit this quarter. Improved product mix, operations efficiencies and better recovery of higher costs through pricing were the key drivers,” Ettinger stated.

“As indicated during our Investor Day in October, we expected that our Grocery Products segment would be down. While the Grocery Products results were disappointing, primarily caused by a soft quarter from the SPAM family of products and VALLEY FRESH chunk meats, we continued to have success building our HORMEL COMPLEATS microwave tray business. We also had strong results from our chili business, up double-digit for the quarter. We expect the Grocery Products segment will have a slow start in fiscal 2008 and the results will improve as the year progresses,” said Ettinger.

“The lower Specialty Foods segment results were primarily due to a very difficult year-ago comparison. This segment has delivered exceptional top and bottom line growth over the last two years. As we have indicated in the past, we expect the long-term growth rate of this segment to be similar to our total company growth rate goals of 5 percent top-line and 10 percent bottom-line,” Ettinger commented.

“The Refrigerated Foods segment has been a strong performer all year and the fourth quarter was no exception. Our strategy to be the industry leader in value-added protein has proven successful and we continue to strengthen our portfolio with innovation. The acquisition of Burke Corporation in August has been a great addition to our portfolio and was accretive to this quarter’s results,” Ettinger said.

“Considering the higher input cost challenges we faced, I am pleased with the results. I believe our balanced model of packaged foods and protein products in addition to our blend of foodservice and retail sales, provides the right combination of stability in difficult environments, yet offers upside opportunity when conditions turn favorable,” Ettinger stated.

“This morning we announced a 23% increase to our annual dividend rate, making the new rate $.74 per share. We have an exceptional history of returning profits to our shareholders through dividend increases. Based on our confidence to deliver improved cash flow in the future, we are pleased that we could provide a substantial increase this year as another way to reward our shareholders,” Ettinger concluded.

Source: Hormel Foods

5m Editor