6:25 AM
Hormel beats on strong sales
Addison Ray
NEW YORK | Tue Nov 23, 2010 8:20am EST
NEW YORK (Reuters) - Hormel Foods Corp (HRL.N) reported higher-than-expected quarterly profit, helped by strong sales across its categories, while Campbell Soup Co's (CPB.N) results disappointed as deep promotions failed to spur sales.
Hormel also forecast fiscal 2011 earnings above Wall Street estimates, despite expected pressure from higher raw material costs, higher commodity grain costs and difficult comparisons.
Profit improvements in Hormel's refrigerated foods and Jennie-O Turkey segment were driven by strong pork operating margins and cost cuts and helped offset declines in the grocery products and specialty foods segment, which were hurt by higher raw material costs.
Hormel, which makes Spam canned meat and Dinty Moore stew, reported quarterly profit of 90 cents per share, compared to 77 cents per share a year earlier and analysts' average estimate of 79 cents per share.
Campbell, the world's biggest soup maker, reported lower quarterly profit, as deep discounts on soup failed spur sales as expected.
Campbell warned earlier this month that the results for its fiscal first quarter were weaker than it expected and cut its forecast for the year, sending shares down nearly 4 percent.
The company said net income fell to $279 million, or 82 cents per share, in its fiscal first quarter, ended on October 31, from $304 million, or 87 cents per share, a year earlier.
Analysts on average were expecting 83 cents per share, according to Thomson Reuters I/B/E/S.
Sales slipped 1.4 percent to $2.17 billion.
Campbell expects fiscal 2011 earnings-per-share growth of 2 percent to 4 percent and net sales growth of 1 percent to 3 percent, including an estimated 1 percentage point benefit from currency exchange rates.
Hormel said it expects fiscal 2011 earnings per share of $3.10 to $3.20 per share. Analysts on average had been expecting $3.05 per share.
The company announced a 21-percent dividend increase on Monday.
(Reporting by Martinne Geller; Additional reporting by Jon Lentz, editing by Dave Zimmerman)
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