By a News Reporter-Staff News Editor at China Weekly News -- Hormel Foods Corporation (NYSE:HRL) reported its performance for the fiscal year 2014 third quarter. All comparisons are to the third quarter of fiscal 2013. HIGHLIGHTS Third Quarter Record diluted EPS of $0.51, up 21 percent from $0.42 per share
Segment operating profit increased 23 percent
Record dollar sales of $2.3 billion, up 6 percent; volume down 1 percent
Grocery Products operating profit down 36 percent; volume down 3 percent; dollar sales down 3 percent
Refrigerated Foods operating profit up 101 percent; volume flat; dollar sales up 12 percent
Jennie-O Turkey Store operating profit up 42 percent; volume down 2 percent; dollar sales up 4 percent
Specialty Foods operating profit down 25 percent; volume down 9 percent; dollar sales down 10 percent
International & Other operating profit up 12 percent; volume up 12 percent; dollar sales up 18 percent
The company reported record fiscal 2014 third quarter net earnings of $138.0 million, up 21 percent from net earnings of $113.6 million a year earlier. Diluted earnings per share for the quarter were $0.51, up 21 percent compared to $0.42 last year. Sales for the quarter were $2.3 billion, up 6 percent from the same period in fiscal 2013. COMMENTARY "Our team was able to achieve another quarter of record sales and earnings, with sales up 6% and earnings per share up 21% versus the same quarter a year ago," said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.
"Strong demand for pork and turkey, and increased sales of value-added products in our Refrigerated Foods, Jennie-O Turkey Store and International & Other segments more than offset a challenging quarter for our Grocery Products and Specialty Foods segments," commented Ettinger. "Our balanced model continues to support consistent revenue and earnings growth." SEGMENT OPERATING HIGHLIGHTS - THIRD QUARTER Grocery Products (16% of Net Sales, 15% of Total Segment Operating Profit)Grocery Products operating profit decreased 36 percent and total segment sales decreased 3 percent, as our core canned meat and microwave meal franchises were impacted by unusually high input costs and related pricing actions taken earlier this year. SKIPPY® peanut butter, HORMEL® bacon toppings and the HERDEZ® line of products within our MegaMex Foods joint venture delivered volume growth. Refrigerated Foods (52% of Net Sales, 40% of Total Segment Operating Profit)Refrigerated Foods segment profit increased 101 percent, and sales increased 12 percent. Results were driven by strong pork operating margins and growth of retail and foodservice value-added products. BLACK LABEL® bacon, HORMEL® REV® snack wraps, LLOYD'S® ribs and HORMEL® FIRE BRAISEDTM meats experienced sales growth. Jennie-O Turkey Store (17% of Net Sales, 29% of Total Segment Operating Profit)Jennie-O Turkey Store segment profit increased 42 percent this quarter and sales were up 4 percent. Increased sales of value-added products along with strong commodity turkey prices and lower feed costs more than offset lower live production performance and higher fuel expenses as the last winter flocks moved through our system this quarter. JENNIE-O® ground turkey and JENNIE-O® deli products contributed to sales growth during the quarter. Specialty Foods (9% of Net Sales, 8% of Total Segment Operating Profit)The Specialty Foods segment posted operating profits 25 percent lower than last year with a 10 percent decrease in sales. As expected, lower segment results were largely due to the July 2013 expiration of the agreement allowing Diamond Crystal Brands to sell certain sugar substitutes into foodservice trade channels. International & Other (6% of Net Sales, 8% of Total Segment Operating Profit)The International & Other segment reported profits up 12 percent and a sales increase of 18 percent. Results were driven by strong growth in our China pork foodservice sales along with the addition of SKIPPY® peanut butter in China. SPAM® luncheon meat exports were impacted by high input costs. OUTLOOK "Heading into the fourth quarter we will build on the momentum of SKIPPY® peanut butter and HORMEL® REV® snack wraps with advertising campaigns during the back-to-school season," commented Ettinger. "We are excited to enhance our portfolio of leading brands with the addition of MUSCLE MILK® premium protein products in the high-growth sports nutrition category."
Keywords for this news article include: Asia, China, Finance, Hormel Foods Corporation.
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