Hormel Foods Earnings Cheat Sheet: Revenue Growth Drives Margin, Profit Increases

S&P 500 (NYSE:SPY) component Hormel Foods Corporation (NYSE:HRL) reported its results for the second quarter. Hormel Foods Corp. produces and markets a variety of meat and food products throughout the United States and internationally.

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Hormel Foods Earnings Cheat Sheet for the Second Quarter

Results: Net income for the meat products company rose to $109.6 million (40 cents/share) vs. $77.9 million (28 cents/share) in the same quarter a year earlier. A rise of 40.7% from the year earlier quarter.

Revenue: Rose 15.3% to $1.96 billion YoY.

Actual vs. Wall St. Expectations: HRL fell in line with the mean analyst estimate of 40 cents/share. Estimates ranged from 34 cents per share to 45 cents per share. It beat the average revenue estimate of $1.82 billion.

Quoting Management: “We are pleased to report double-digit growth in both earnings and sales for the quarter. Earnings growth was led by our Refrigerated Foods and Jennie-O Turkey Store segments, both of which had a strong quarter. We are also gratified to attain sales growth in all five of our segments,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. “Our Refrigerated Foods segment generated excellent results, benefitting from strong pork operating margins, and our Jennie-O Turkey Store segment delivered another outstanding quarter, aided by stronger commodity meat prices and improved efficiencies. Our international business in our All Other segment also achieved impressive results, driven by strong export sales. Both our Grocery Products and Specialty Foods segments were pressured by higher commodity costs during the quarter,” remarked Ettinger.

Key Stats: The company has now seen net income rise in four-straight quarters. In the first quarter, net income rose 33.8% while the figure climbed 16.6% in the fourth quarter of the last fiscal year and 10.6% four quarters ago from the year earlier.

Revenue has risen the past four quarters. Revenue increased 11.2% to $1.92 billion in first quarter. The figure rose 23.2% in fourth quarter of the last fiscal year from the year earlier and climbed 9.9% in third quarter of the last fiscal year from the year-ago quarter.

Gross margins grew 0.2 percentage point to 16.7%. The growth seemed to be driven by increased revenue, as the figure rose 15.3% from the year earlier quarter while costs rose 15%.

Competitors to Watch: Smithfield Foods, Inc. (NYSE:SFD), Tyson Foods, Inc. (NYSE:TSN), ZHONGPIN INC. (NASDAQ:HOGS), General Mills, Inc. (NYSE:GIS), Pilgrim’s Pride Corp. (NYSE:PPC), Seaboard Corporation (AMEX:SEB),  J&J Snack Foods Corp. (NASDAQ:JJSF), Ralcorp Holdings, Inc. (NYSE:RAH), The Hain Celestial Group, Inc. (NASDAQ:HAIN), Kellogg Company (NYSE:K), ConAgra Foods, Inc. (NYSE:CAG), Inventure Foods, Inc. (NASDAQ:SNAK), TreeHouse Foods Inc. (NYSE:THS), PepsiCo, Inc. (NYSE:PEP), and Golden Enterprises, Inc. (NASDAQ:GLDC)

Stock Performance: Shares of HRL are down 1.5% this morning from the previous close of $30.02.

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(Sources: YahooFinance, Xignite Financials)