TOP STORIES
Hormel Revenue Drops as Turkey Troubles Linger
Hormel Food Corp.'s revenue dropped as a turkey glut continues
to hamper its Jennie-O turkey business, though the decline was less
steep than analysts expected.
Hormel said Tuesday its fourth-quarter revenue decreased 5% from
a year ago to $2.5 billion. Analysts polled by Thomson Reuters had
expected $2.4 billion.
Higher Costs Extend Campbell's Sales Decline -- 2nd Update
Campbell Soup Co. said higher costs and a dispute with a major
customer hurt results and extended a yearslong sales slide as the
company struggles to diversify beyond canned soup.
Shares fell as the food maker said one key customer had a
"different promotional approach," a dispute that cut into revenue.
The Wall Street Journal reported in August that Wal-Mart Stores
Inc. and Campbell had disagreed on promotional pricing and shelf
space for canned soup. Wal-Mart accounts for about 20% of
Campbell's annual sales.
In all, the company said profit fell to $275 million, or 91
cents a share, down from $292 million, or 94 cents a share, a year
earlier. On an adjusted basis, the company reported earnings per
share of 92 cents.
Revenue fell 1.9% to $2.16 billion.
Hormel May Trim Away More Businesses -- Market Talk
10:42 ET - After Hormel Foods grappled with shifting consumer
tastes and commodity-price swings in everything from pork bellies
to avocados, CEO Jim Snee says the Spam maker's 2017 results didn't
meet management's expectations. So Hormel's looking to tighten up,
realigning its supply chain operations and uniting its grocery
products and specialty products divisions. Snee also says Hormel,
which has bulked up via a string of acquisitions over the last
decade, may look to divest non-strategic assets, and "take a hard
look at underperforming assets." Hormel last year sold sugar and
salt packet supplier Diamond Crystal Brands unit to a private
equity firm. (jacob.bunge@wsj.com; @jacobbunge)
STORIES OF INTEREST
Hain Shares Rise on Buyout Possibility -- Market Talk
12:10 ET - Hain Celestial shares have risen over the past few
days on speculation Nestle might be interested in buying the
natural-foods conglomerate. Hain, under pressure from an activist
investor, is looking at various possibilities. Wells Fargo thinks
Hain would best maximize its value if it carved up its assets to
multiple strategic buyers, very similar to Sara Lee's approach five
years ago. Given fast-emerging competitive pressures, and its size,
with $4.3B in market cap, it would require financial flexibility
that most pubic companies don't have, the bank says. Wells Fargo
thinks Nestle would likely be a good fit for Hain's baby food, skin
care and tea businesses while others would find value in yogurt,
salty snacks and protein. Shares are up about 14% over the past
week. (annie.gasparro@wsj.com)
McDonald's Offers Sweeteners to Bond Investors: LBBW -- Market
Talk
1049 GMT - The initial spread thoughts for McDonald's upcoming
dual-tranche 2024- and 2029-dated euro issuance are slightly higher
than the yield curve for peer BBB+ rated issuers, says LBBW
investment analyst Juergen Graf. The spreads are, meanwhile,
"significantly" higher than those of the existing McDonald's bonds.
Therefore, the spread indicates relatively favorable pricing. The
IPTs are mid-swaps +45 basis points area for the January 2024 bond
and mid-swaps +65 bps area for the November 2029 bond. LBBW rates
McDonald's bonds as "basis investment"--standard for a portfolio.
It prefers the six-year issuance with a 30 bps spread limit.
(emese.bartha@wsj.com; @EmeseBartha)
FUTURES MARKETS
Cattle Futures Turn Higher; Hogs Lower
Cattle futures rebounded on Tuesday as the week's cash trade
picked up.
The cattle market started the week under pressure after a
government report showed large numbers of cattle destined for
slaughterhouses, an indication of growing supplies next year.
December live cattle futures rose 0.8% to $1.17975 a pound at
the Chicago Mercantile Exchange. Wholesale-beef prices rose $1.63
to $207.81 per 100 pounds at midday.
Hog futures were lower, however, giving back Monday's gains. CME
December lean hog contracts fell 2.1% to 60.7 cents a pound.
Trading patterns in the hog futures market suggest that prices
could fall further, Mr. French said.
CASH MARKETS
Zumbrota, Minn Hog Steady At $35.00 - Nov 21
Barrow and gilt prices at the Zumbrota, Minn., livestock market
today are steady at $35.00 per hundredweight.
Sow prices are steady. Sows weighing under 450 pounds are
$36.00-$38.00, 400-450 pounds are at $36.00-$38.00, 450-500 pounds
are $36.00-$38.00 and those over 500 pounds are $41.00-$43.00.
The day's total run is estimated at 100 head.
Prices are provided by the Central Livestock Association.
Estimated U.S. Pork Packer Margin Index - Nov 21
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
*
Nov 21 +$44.53 +$42.28
Nov 20 +$49.26 +$45.96
Nov 17 +$44.14 +$42.20
* Based on Iowa State University's latest estimated cost of production.
A positive number indicates a processing margin above the cost of production of the animals.
Beef-O-Meter
This report compares the USDA's latest beef carcass composite
values as a percentage of their respective year-ago prices.
Beef
For Today Choice 114.0
(Percent of Year-Ago) Select 113.0
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Tuesday rose $2.45 per
hundred pounds, to $208.63, according to the USDA. Select-grade
prices rose 60 cents per hundred pounds, to $188.65. The total load
count was 178. Wholesale pork prices fell $1.71, to $80.07 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
November 21, 2017 17:45 ET (22:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.