Hormel 4Q Earnings Climb on Spam and Skippy Export Sales
AUSTIN, Minn. (AP) — Hormel Foods said Tuesday that its fiscal fourth-quarter net income rose 19 percent, benefiting from strong export sales of its Spam canned ham and Skippy peanut butter. Its performance beat analysts' expectations.
The Austin, Minn., company also boosted its annual dividend 18 percent to 80 cents per share from 68 cents per share.
Hormel earned $157.3 million, or 58 cents per share, for the period ended Oct. 27. That's up from $132.6 million, or 49 cents per share, a year earlier.
Analysts polled by FactSet expected earnings of 54 cents per share.
Revenue rose 7 percent to $2.32 billion from $2.17 billion. Wall Street expected $2.31 billion in revenue.
The biggest gain came from the international segment, with sales rising 38 percent due most to the strong export sales of Spam and Skippy products. Sales for the grocery products division increased 23 percent led by Skippy sales — which Hormel bought in January from Unilever for $700 million. The unit also reported strong sales of its Hormel Compleats microwave meals, Hormel bacon toppings and the Herdez products within its MegaMex Foods joint venture. The refrigerated foods and Jennie-O Turkey Store units also posted sales increases.
Sales for the specialty foods segment fell 14 percent, hurt by the expiration of a deal allowing Diamond Crystal Brands to sell some sugar substitutes into foodservice trade channels.
For the year, Hormel Foods Corp. earned $526.2 million, or $1.95 per share. In the previous year it earned $500.1 million, or $1.86 per share. Annual revenue increased 6 percent to $8.75 billion from $8.23 billion.
The company anticipates 2014 earnings between $2.17 and $2.27 per share. Analysts predict earnings of $2.25 per share.
Chairman, President and CEO Jeffrey Ettinger said in a statement that Hormel should benefit from lower grain and turkey commodity costs, but that it may be somewhat offset by high beef input costs and hog supply uncertainty.
Hormel declared a quarterly dividend of 20 cents per share. The dividend will be paid on Feb. 14, 2014 to shareholders of record on Jan. 22, 2014.