(RTTNews) - Meat producer Hormel Foods Corp. (HRL: News ) Tuesday reported higher profit for the fourth quarter of fiscal 2009, despite a 10% decline in sales, driven by lower costs. The company lifted its annual dividend and provided earnings outlook for fiscal 2010. The company also said that it expects to restore top-line growth in 2010 on an annualized basis.

Cash-strapped consumers have scaled back on costs during the recession by eating more at home than at restaurants. Hormel has benefited from the recession as its value-priced items like Spam family of products and Dinty Moore canned stews continue to appeal to budget-conscious consumers because of their low costs.

The company's fourth-quarter net earnings were $103.88 million or $0.77 per share, compared to $67.81 million or $0.50 per share last year. The company noted that the prior-year results included retrospective reclassification of shipping and handling expenses to cost of products sold from selling, general and administrative.

On average, 9 analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.

The company's net sales declined 10% to $1.68 billion from $1.86 billion a year ago. Seven analysts had a consensus sales estimate of $1.82 billion.

Gross profit rose to $304.19 million from $276.24 million in the prior-year quarter. Interest & Investment income for the quarter was $2.18 million, compared with a loss of $19.96 million in the previous year quarter.
Commenting on the results, Jeffrey Ettinger, chairman of the board, president and chief executive officer of Hormel Foods, stated, "All five business segments contributed to our third consecutive strong quarter, generating a 54 percent increase in EPS and a 17 percent increase in segment operating profit. We are happy to get back on track with our long-term record of earnings growth after a challenging year in 2008."

The company in August reported a 49% surge in its profit for the sequential third quarter from last year, helped by an increase in earnings at its refrigerated foods segment, improved results at its Jennie-O Turkey Store segment and lower costs. The results for the third quarter also benefited from better investment performance in the company's rabbi trust.

The Austin, Minnesota-based company's net income for the third quarter increased to $77.17 million, or $0.57 per share, from $51.95 million, or $0.38 per share, in the prior-year quarter. Net sales for the quarter were $1.57 billion, down 6% from $1.68 billion in the prior-year quarter.

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