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S&P 500 (NYSE:SPY) component Hormel Foods Corporation (NYSE:HRL) reported net income above Wall Street’s expectations for the second 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 Earnings Cheat Sheet for the Second Quarter
Results: Net income for Hormel Foods Corporation rose to $127.9 million (48 cents per share) vs. $109.6 million (40 cents per share) in the same quarter a year earlier. This marks a rise of 16.7% from the year-earlier quarter.
Revenue: Rose 2.7% to $2.01 billion from the year-earlier quarter.
Actual vs. Wall St. Expectations: Hormel Foods Corporation beat the mean analyst estimate of 42 cents per share. Analysts were expecting revenue of $2.05 billion.
Quoting Management: “We are pleased to report record earnings and sales for the second quarter. This is a good example of our balanced business model in action, as we were able to increase earnings in four out of five segments.” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer, “Sales grew three percent, again with four of our five segments registering gains.” “Our Jennie-O Turkey Store segment delivered another outstanding quarter, driven by value-added sales growth. Our International business also achieved impressive results, led by strong export sales. Both our Grocery Products and Specialty Foods segments returned to earnings growth during the quarter. Results of our Refrigerated Foods segment were significantly pressured by lower pork operating margins,” Ettinger remarked. “We are particularly encouraged by the continued growth of our Jennie-O Turkey Store value-added sales and our MegaMex Foods joint venture,” Ettinger stated.
Revenue has increased for four quarters in a row. Revenue increased 6.1% to $2.04 billion in the first quarter. The figure rose 2% in the fourth quarter of the last fiscal year from the year earlier and climbed 10.4% in the third quarter of the last fiscal year from the year-ago quarter.
The profit increase last quarter interrupts a two-quarter year-over-year profit decreases. In the first quarter, net income fell 13.7% while the figure dropped in the fourth quarter of the last fiscal year.
The company beat estimates last quarter after being in line with expectations in the first quarter with net income of 48 cents per share.
Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from 40 cents a share to 41 cents over the last ninety days. The average estimate for the fiscal year has remained at $1.82 per share.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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