Hormel Foods reported a profit for the first quarter that increased 12 percent from last year, helped by sales growth across all five of its operating segments.
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The company also raised its initial earnings guidance for the full-year 2015, citing strong performance in the first quarter.
Hormel Foods posted record net earnings of $171.72 million or $0.64 per share for the first quarter, higher than $153.35 million or $0.57 per share in the prior-year quarter.
Excluding items, adjusted net earnings for the quarter was $187.34 or $0.69 per share. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share for the quarter. Analysts' estimate typically excludes one-time items.
Net sales for the quarter increased 6.8 percent to $2.40 billion from $2.24 billion in the same quarter last year, but missed seven Wall Street analysts' consensus estimate of $2.47 billion. Sales volumes for the quarter increased 3 percent from last year.
Hormel Foods' largest segment, refrigerated foods, recorded a 1.4 percent growth in sales to $1.14 billion, or 48 percent of total net sales, from the prior-year quarter. Operating profit also grew 18.6 percent, while sales volumes declined 3 percent.
Sales for the Jennie-O Turkey store totaled $440.02 million, or 18 percent of total net sales, a 10.2 percent increase from the same quarter last year. Operating profit at the segment surged 56.2 percent, and sales volumes increased 9 percent.
Grocery products sales increased 2 percent to $409.75 million, or 17 percent of total net sales, from the year-ago quarter. However, segments' operating profit declined 26.6 percent, while volume was up 1 percent or down 5 percent, excluding sales of MegaMex Foods products.
Sales for specialty foods totaled $263.27 million or 11 percent of total net sales, up 34.3 percent from the prior-year quarter. Operating profit also dropped 12.6 percent, while volume grew 17 percent or down 2 percent, excluding sales of CytoSport Holdings, Inc.
All other segment, including the international business unit, contributed sales of $137.81 million or 6 percent of total net sales, 17.4 percent higher than the year-ago quarter. However, operating profit dropped 35.2 percent, while sales volumes were up 12 percent or 7 percent, excluding sales of Skippy peanut butter.
Total segment operating profit rose 9.6 percent to $268.51 million from the year-ago quarter.
Looking ahead to fiscal 2015, Hormel Foods raised its earnings guidance to a range of $2.50 to $2.60 per share from the prior forecast range of $2.45 to $2.55 per share. Street is currently looking for full-year 2015 earnings of $2.75 per share. ■
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