Hormel Foods’ (NYSE:HRL) first-quarter profit narrowed 14% on weaker volumes in its grocery products and Jennie-O Turkey Stores, as well as stubbornly high raw material costs that squeezed pork margins.
The Austin, Minn.-based maker of meat and food products earned $128.39 million, or 48 cents, compared with a year-earlier $148.8 million, or 55 cents. The results matched averaged analyst estimates in a Thomson Reuters poll.
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Revenue for the three months ended Jan. 29 was $2.04 billion, up 6% from $1.9 billion a year ago, narrowly beating the Street’s view of $2.03 billion.
Segment operating profit fell 17% during the period, led by a 44% decline in its refrigerated foods segment on significantly lower pork operating margins, partially offset by strong export sales that lifted its international business.
Hormel CEO Jeff Ettinger said the company anticipates a “challenging operating environment” in 2012. While year-over-year comparisons were expected to be difficult in the first half of the year, they are on track to be more favorable later on.
The company looks forward to sales improvements in its grocery products and meats group, led by Hormel and Spam brands, leading the company to reiterate its fiscal profit view of $1.79 to $1.89 a share.
Wall Street is anticipating a full-year profit of $1.81 a share.