Hormel In Line, Reiterates Guidance - Analyst Blog
February 23 2012 - 3:45AM
Zacks
On February 23, Hormel
Foods Corporation (HRL) posted its
financial results for the first quarter of 2012 with an EPS of 48
cents, down 13% compared with 55 cents in the prior-year period and
in line with the Zacks Consensus Estimate.
Net earnings reached $128.4
million, down 14% from $148.8 million in the first quarter of
2011.
Net sales for the first quarter of
2012 were $2,039.4 million, up 6.1% y/y, slightly missing the Zacks
Consensus Estimate of $2,047 million. The year-over-year increase
was driven by four of the company’s five segments registering sales
gain in the quarter. International business also contributed to
growth, fueled by strong export sales.
During the first quarter of 2012,
revenue from Grocery Products inched down 2.7% year over year while
Jennie-O Turkey Store witnessed a stronger revenue improvement of
3.5%. The Refrigerated Foods segment ended the quarter with an
increase of 7.2% in revenue year over year while Specialty Foods
registered a rise of 13.9%. Revenue from all other items surged
16.6% during the reported quarter.
Operating profit for Grocery
Products and Refrigerated Foods for the reported quarter, decreased
9.2% and 44.1% y/y, respectively. However, operating profit for
Jennie-O Turkey Store climbed 4.0%, led by increased retail
value-added sales. Specialty Foods dropped 3.7% year over year.
Gross profit, for the first quarter
of 2012, was recorded at $337.4 million, down from $374.0 million
reported in the year-ago comparable quarter. Selling, general and
administrative (SG&A) expenses were up by 5.0% year over year,
reaching $152.5 million in the reported quarter.
Exiting the first quarter, net cash
provided by operating activities was recorded at $152.2 million
compared with $165.3 million in the year-ago comparable quarter. At
the end of first quarter 2012, the company recorded cash and cash
equivalents of $548.6 million, down from $598.8 million at the end
of the previous year comparable quarter. The long-term debt (less
current maturities) stood at $250 million at the end of 1Q12.
Outlook: Hormel
maintains full-year earnings guidance range of $1.79 to $1.89 per
share anticipating slowly improving results from Refrigerated Foods
segment with pork operating margins returning to normalized levels.
Sales in the Grocery Products segment and Meat Products group are
also expected to improve with the effects of new advertising
campaigns.
The Company paid 334th
consecutive quarterly dividend, at the annual rate of $0.60,
effective February 15, 2012.
Based in Austin, Minnesota, Hormel
Foods Corporation is a leading manufacturer and marketer of various
meat and food products in the United States and internationally.
The company faces stiff competition from ConAgra Foods
Inc. (CAG), Kraft Foods Inc. (KFT) and
Tyson Foods Inc. (TSN).
We currently maintain a long-term
Neutral recommendation on the stock. Hormel has a Zacks #4 Rank,
which translates into a short-term Sell rating (1-3 months).
CONAGRA FOODS (CAG): Free Stock Analysis Report
HORMEL FOODS CP (HRL): Free Stock Analysis Report
KRAFT FOODS INC (KFT): Free Stock Analysis Report
TYSON FOODS A (TSN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From May 2024 to Jun 2024
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Jun 2023 to Jun 2024