Hormel Foods 3rd-quarter profit falls 25 minutes ago

Hormel Foods 3rd-quarter profit falls 25 minutes ago



AUSTIN, Minn. - Hormel Foods Corp. said Thursday its fiscal third-quarter profit fell 4 percent year-over-year, due to weakness in its chunk chicken and Chi-Chi's sauce businesses, but the company reaffirmed guidance for the fourth-quarter and full year.

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Net income declined to $57.4 million, or 41 cents per share, from $59.6 million, or 43 cents per share, a year ago.

Sales totaled $1.52 billion, up from $1.41 billion in the 2006 period.

Profit was in line with the revised forecast of analysts surveyed by Thomson Financial, and sales just beat Wall Street's $1.5 billion consensus estimate. Earlier this month the company lowered its profit outlook from an estimated range of 42 cents to 48 cents per share to a range of 40 cents to 42 cents per share.

"The higher-than-expected input costs within the grocery products segment pressured profitability more than we anticipated. This caused the company to fall short of the original expectations for the quarter," said Jeffrey M. Ettinger, chairman, president and chief executive.

The company said it saw distribution gains and sales growth from its Hormel Compleats microwave trays, but part of this growth was offset by weakness in its chunk chicken and Chi-Chi's sauce businesses.

Hormel said it still expects to see higher input costs continue into the fourth quarter, but reaffirmed its previous profit outlook for the fourth quarter and full year. The company forecasts quarterly earnings of 62 cents to 68 cents per share, compared with analysts' 64-cent average estimate, and $2.06 to $2.12 per share for the full year.

Analysts are predicting full-year profit of $2.08 per share.

Also Thursday, Hormel announced it had acquired privately-held Burke Corp., a manufacturer and marketer of pizza-toppings, meatballs, Mexican meat fillings and breakfast meats, for about $110 million.

Net sales of $125 million are anticipated from Burke, and Hormel expects the deal to be accretive to its fiscal 2008 earnings.