DOW JONES NEWSWIRES
Hormel Foods Corp. (HRL) boosted its fiscal-year earnings
outlook, citing solid performances from numerous segments,
including improvement in its long-struggling Jennie-O
operations.
The raised view comes as the meat industry, like many others,
deals with a demand slump and oversupply woes that have forced
producers, processors and supermarkets to cut production and
prices.
The maker of Spam luncheon meat now expects profit of $2.36 to
$2.42 a share. The company in May projected earnings at the high
end of its $2.15 to $2.25 a share target.
Hormel said Monday the boost was led by a "strong" performance
for its refrigerated-foods business, the grocery segment and
improvement at Jennie-O. The turkey operations were hurt for some
time by sharply higher feed costs, a bane to many meat producers
the past several years. But commodity costs have fallen sharply the
past year.
The company also said it benefited from a better investment
performance in its rabbi trust, which had been hard hit by the
stock-market turmoil. Assets of the trust, established to fund
executive retirement and deferred income plans, are invested in
equity and income securities and generally track the markets.
In May, Hormel posted a 3.6% rise in fiscal second-quarter
profit on a gain from a dissolved joint venture, as production cuts
helped offset falling volume. But Chairman and Chief Executive
Jeffrey M. Ettinger said the company had "seen improvement" in
sales of some convenience-food items.
The company will provide more details when it releases its
fiscal third-quarter results on Aug. 20.
Hormel shares closed Friday at $36.12 and were inactive
premarket Monday. The stock is up 1.4% the past year.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com;