Hormel’s performance for the quarter ended Jan. 30 outran Wall Street’s expectations. Its shares rose 2% to $27.48 in early morning trades.
The Spam maker posted net income of $148.8 million, or 55 cents a share, up from net income of $111.2 million, or 41 cents a share. Sales rose 11% to $1.92 billion.
Analysts had forecast Hormel /quotes/comstock/13*!hrl/quotes/nls/hrl (HRL 27.44, +0.52, +1.93%) to earn 43 cents a share on sales of $1.85 billion, according to FactSet Research. .
Higher costs for raw materials did eat into Hormel’s profit. During the quarter, operating profit for Hormel’s grocery unit that sells Spam and Hormel-branded chili fell 10%. But that was offset by a 122% increase in operating profit for its Jennie-O Turkey unit.
As the year progresses, Hormel said it will blunt higher agricultural commodity costs through price increases and supply-chain cuts.
Minnesota-based Hormel raised its fiscal 2011 outlook to a profit of $1.62 to $1.68 a share, up from $1.55 to $1.60 a share. Analysts polled by FactSet are looking for Hormel to earn $1.60 a share.
Hormel’s stock has been a top performer among major U.S. food companies. Since February of last year, Hormel shares are up 32% compared to the 11% gain for the Dow Jones U.S. Food Producers Index. For the latest updates PRESS CTR + D or visit Stock Market news Today
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