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Hormel Foods lifts earnings guidance for 2010 on strong Q3 results

Published: 20:22 20 Aug 2010 BST

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Branded food and meat products manufacturer Hormel Foods (NYSE:HRL) has raised its full year earnings guidance range from $2.75 to $2.85 per share to $2.85 to $2.91 per share on the back of positive fiscal Q3 2010 results.

The company reported net earnings of $85.4 million for the quarter, up 11% from a year earlier on account of profit gains in four of its five segments. Diluted earnings per share were $0.63 this year compared to $0.57 per share last year.

Sales increased by 10% in Q3, totalling $1.7 billion, and segment operating profit was up 13% from last year. The area that saw the largest increase was its Jennie-O Turkey Store, which showed a whopping 93% increase in its operating profit due to overall improvement in operating efficiencies, along with favorable commodity pricing.

Net sales for the quarter were flat, due to lower commodity meat sales, and volume was down 6%.

The only segment that did show profit growth was the company`s grocery products business, which saw its profit decline 23% primarily because of higher raw material costs.  Net sales, however, increased 12% for the quarter, due to its MegaMex Foods products, and by continued strong sales of Hormel chili.

"We continue to be pleased with the excellent progress made with our new product lines in both our MegaMex Foods business and our Country Crock side dish acquisition, both of which contributed to our positive results this quarter," said chairman, president and CEO Jeffrey M. Ettinger.

The company was up 0.76% at $43.70 in the first few hours of trading today.

Hormel Foods, based in Austin, Minn., is a multi-national manufacturer and marketer of consumer-branded food and meat products. The company is a member of the Standard & Poor's 500 Index.

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