Hormel Foods Announces Third Quarter Earnings
AUSTIN, Minn., Aug. 13 /PRNewswire/ -- Hormel Foods Corporation (NYSE: HRL) today announced earnings of $20,994,000, or $.28 per share of common stock for the 13-week period ended July 25. This represents an increase of 15.7 percent over third quarter earnings one year ago of $18,153,000, or $.24 per share. Net earnings for the first three quarters were $94,139,000, a 45.2 percent improvement over 1997 nine-month earnings of $64,823,000. Earnings per share for the 39 weeks were $1.23 versus $.84 for the same three quarters of last year. The nine-month results include an extraordinary gain of $17,402,000, or $.23 per share, for the sale of the company's Davenport (Iowa) gelatin/specialized proteins plant to Goodman Fielder Limited, Sydney, Australia. Excluding the one-time gain, the company generated net earnings for the 39 weeks of $76,737,000, or $1.01 per share, an increase of 18.4 percent over the comparable period of fiscal 1997. For the first three quarters of fiscal 1998, the average number of shares used in calculating the per share amounts was 76,274,000. Joel W. Johnson, chairman of the board, president and chief executive officer, noted that tonnage growth of 8.6 percent for the third quarter and 7.4 percent year-to-date enabled the company to report increased earnings for both the 13-week third quarter and nine months. "All our core marketing groups and nearly every major product category achieved volume growth, many recording double-digit gains," said Johnson. "Equally satisfying, our strategy of focusing on value-added, consumer-branded meat and food products enabled us to expand margins." Although tonnage gains remained strong, third quarter dollar sales were $755,769,000, a 3.1 percent decrease from net sales of $779,679,000 for the corresponding 13-week period of last year. Net sales for the 39 weeks of the current year were $2,349,008,000, down 1.7 percent from nine-month sales last year of $2,388,443,000. Generally reduced selling prices for fresh pork and turkey products contributed to the decline in dollar sales. Johnson noted that performance of the company's Foodservice Group has been especially impressive. "Foodservice succeeded in recording its ninth consecutive quarter of double-digit tonnage growth with volume increases attained in virtually every category, including presliced meats, portion- controlled pork and precooked roast beef, sausage, ham and vending products." The Meat Products Group, enjoying its best year, continued to make great progress with its branded, value-added line of fresh and processed products. Within key branded categories, deli-style and boneless hams performed very well as did company breakfast meats, Hormel microwave bacon, Black Label bacon, Range Brand bacon and Little Sizzlers pork sausage. Sales volume and distribution of Always Tender fresh pork and Always Tender flavored pork continued to enjoy rapid growth. Within the Prepared Foods Group, third quarter tonnage for the Grocery Products Division surpassed that of one year ago, resulting in a year-to-date record tonnage level. Much of the total volume increase was generated from such flagship brands as SPAM luncheon meat, Hormel chili, Dinty Moore stew and Mary Kitchen hash. Other major product lines, including Stagg chili, Hormel chunk meats, Hormel bacon bits, Herb-Ox bouillon and Hormel microwave meals also performed well. Jennie-O Foods posted record volume, ending the quarter 20.2 percent ahead of one year ago and up 23.2 percent year-to-date. Although turkey industry pricing has shown signs of rebounding, generally unfavorable market conditions produced excess industry supplies and depressed selling prices and operating margins. For Hormel Foods International, export tonnage volume rose 31.4 percent for the quarter. "Our two Chinese joint ventures remain in a start-up mode," said Johnson. "The ventures continue to increase distribution in Beijing and Shanghai with more than 750 retail stores and major foodservice accounts such as McDonald's, Pizza Hut, Dairy Queen and Domino's now serviced." New bologna, chopped ham and luncheon meat products were introduced to complement the core line of franks, sausage, ham and other branded processed meats. In Australia, launch of the 14-item Stagg chili line has met with considerable success while good volume growth for SPAM luncheon meat led to a record category share in the United Kingdom. THIRD QUARTER REPORT TO THE SHAREHOLDERS Consolidated Condensed Statements of Earnings (unaudited) Thirteen Weeks Ended Thirty-nine Weeks Ended (In Thousands Except Per Share Amounts) July 25, 1998July 26, 1997 July 25, 1998July 26, 1997 Net Sales $755,769 $779,679 $2,349,008 $2,388,443 Earnings before Income Taxes 33,859 28,190 149,598 102,076 Provision for Income Taxes 12,865 10,037 55,459 37,253 Net Earnings 20,994 18,153 94,139 64,823 Earnings Per Share $.28 $.24 $1.23 $.84
SOURCE Hormel Foods
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