logo
  

Hormel Foods Shares Slump 9% After 2013 Earnings Forecast Cut

Hormelfoods 061813

Packaged food and meat products maker Hormel Foods Corp. (HRL) on Tuesday trimmed its earnings guidance for the full-year 2013, which also falls below current analysts' expectations. The company said it 'remains very bullish' about its future earnings potential.

Following the announcement, the company's shares are trading lower by 9 percent in early dealings.

"Lower than expected results in our pork operations, higher input costs and softer sales of our retail products in our Refrigerated Foods segment are the primary reason for the expected shortfall in our second half results," Chairman, President and CEO Jeffrey Ettinger said.

The Austin, Minnesota-based company lowered its earnings guidance to a range of $1.88 to $1.96 per share from the prior forecast in the range of $1.93 to $2.03 per share.

On average, nine analysts polled by Thomson Reuters expect the company to report earnings of $1.99 per share for fiscal 2013. Analysts' estimates typically exclude special items.

In late May, the company had reported earnings and sale for the second quarter that missed analysts' expectations. However, the company then maintained its earnings guidance for the full-year 2013.

Profit for the second quarter decreased two percent from last year, reflecting increased corporate expenses amid higher employee costs. Net earnings declined to $125.52 million or $0.46 per share from $127.89 million or $0.48 per share last year. However, quarterly sales increased 6.9 percent to $2.15 billion from a year ago. Sales volumes also improved 4 percent from last year.

The company said at that time that it anticipates the negative factors that are impacting earning to improve or moderate in the back half of the year.

In the first half, the company was faced with weaker pork operating margins and challenges in live hog production operations as well as pressures from higher commodity grain prices and weaker turkey commodity meat prices.

HRL closed Monday's regular trading session at $40.65, up $0.34 on a volume of 0.73 million shares. In the past 52-week period, the stock has been trading in a range of $27.28 to $43.17.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT