Hormel Foods Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Hormel Foods (NYSE:HRL) will unveil its latest earnings on Thursday, August 23, 2012. Hormel Foods produces and markets a variety of meat and food products throughout the United States and internationally.

Hormel Foods Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 41 cents per share, a rise of 13.9% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting profit of $1.85 per share, a rise of 6.3% from last year.

Past Earnings Performance: Last quarter, the company topped estimates by 0 cents, coming in at net income of 48 cents per share against a mean estimate of profit of 41 cents. The company fell in line with estimates in the first quarter.

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A Look Back: In the second quarter, profit rose 16.7% to $127.9 million (48 cents a share) from $109.6 million (40 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 2.7% to $2.01 billion from $1.96 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 5.2% in revenue from the year-earlier quarter to $2.01 billion.

Stock Price Performance: Between May 23, 2012 and August 17, 2012, the stock price fell 87 cents (-2.9%), from $29.51 to $28.64. The stock price saw one of its best stretches over the last year between March 14, 2012 and March 29, 2012, when shares rose for 12 straight days, increasing 3.2% (+91 cents) over that span. It saw one of its worst periods between November 15, 2011 and November 23, 2011 when shares fell for seven straight days, dropping 5.6% (-$1.67) over that span.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 10.4% in the third quarter of the last fiscal year, 2% in the fourth quarter of the last fiscal year and 6.1% in the first quarter before increasing again in the second quarter.

Last quarter’s earnings rise was a switch from preceding drops, so the upcoming earnings announcement is a chance to build on last quarter’s result. After net income declines in the fourth quarter of the last fiscal year and first quarter, profit rose in the second quarter.

Analyst Ratings: There are mostly holds on the stock with six of nine analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.94 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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

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