Yesterday, Hormel Foods Corp. (HRL) reported heartening performance for the fourth quarter and fiscal year 2009.
 
During the fourth quarter of 2009, the company reported EPS of 77 cents, up 54% from 50 cents per share in the same quarter of 2008. It was also above the Zacks Consensus Estimate of 52 cents per share. However, revenues decreased 10% year over year and reached $1.68 billion. Volume was also down 3% from the fourth quarter of 2008.
 
Part of this substantial decrease is attributable to the planned reduction of turkeys at Jennie-O Turkey Store segment, decreased sales revenue due to lower commodity prices in pork and turkey complexes, greater promotional spending, continuing weak food service sales environment, the loss of Carapelli Olive Oil sales and some additional intentional product rationalization.
 
Grocery Products operating profit was up 12% year over year; while volume and revenue was down 7% and 12% respectively. Refrigerated Foods operating profit was up 23%; volume was up 1%, however sales was down 9%. Jennie-O Turkey Store operating profit was up 6%, while volume was down 6% and sales was down 10%. Specialty Foods operating profit was up 9%, volume was down 8% and sales were down 12%. 
 
During full year of fiscal 2009, EPS of $2.53 was up 22% from $2.08 per share in 2008. Revenue of $6.53 billion was down 3% from 2008. Overall volume was down 3%. Grocery Products operating profit was up 9% from 2008, while volume was down 3% and sales were down 2%. Refrigerated Foods operating profit was up 7%. However, volume was down 1% and revenue was down 2%. Jennie-O Turkey Store operating profit was up 11%, while both volume and sales were was down 3%. Specialty Foods operating profit was down 2%, volume was down 12% and sales were down 11%.
 
Having returned to more normal earnings growth levels this year, management is confident in its ability to continue to enhance the bottom line. The company intends to tackle the challenge of a continued weak economy and reduced consumer spending, and expect to restore top-line growth on an annualized basis in 2010. Thus, the company expects EPS to be in the range of $2.63 to $2.73 in the fiscal 2010 up from a previous view of $2.60 to $2.70. The company also said it now expects to make $1 billion in operating cash flow for the year, versus a prior expectation of $850 million to $900 million.
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