Hormel Foods Earnings: Rising Revenue Helps Margins and Profit Climb

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S&P 500 (NYSE:SPY) component Hormel Foods Corporation (NYSE:HRL) reported its results for the fourth quarter. Hormel Foods produces and markets a variety of meat and food products throughout the United States and internationally.

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Hormel Foods Corporation Earnings Cheat Sheet

Results: Net income for Hormel Foods Corporation rose to $132.6 million (49 cents per share) vs. $117.3 million (43 cents per share) in the same quarter a year earlier. This marks a rise of 13% from the year-earlier quarter.

Revenue: Rose 3.2% to $2.17 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Hormel Foods Corporation fell in line with the mean analyst estimate of 49 cents per share. It beat the average revenue estimate of $2.05 billion.

Quoting Management: “We achieved solid results in the quarter with earnings per share and sales up 14 percent and three percent, respectively. We are pleased to have generated both segment profit and sales increases in four out of five segments. We continue to enjoy sales and volume growth in many of our value-added franchises, demonstrating that our growth strategies are working,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.

Key Stats:

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 12.9% and in the second quarter, the figure rose 16.7%.

Revenue has risen for the last four quarters. Revenue increased 5.1% to $2.01 billion in the third quarter. The figure rose 2.7% in the second quarter from the year earlier and climbed 6.1% in the first quarter from the year-ago quarter.

The company has met estimates for two consecutive quarters. It reported net income of 41 cents in the third quarter.

Margins rose in the third quarter after falling the quarter before. Gross margin grew 0.2 percentage point from the year-earlier quarter to 16.2%. In the second quarter, the figure rose 0.3 percentage point to 15.3% from the year earlier quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved up from 50 cents a share to 51 cents over the last thirty days. For the fiscal year, the average estimate has moved up from $1.85 a share to $1.86 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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