Hormel Foods (NYSE:HRL) revealed better-than-expected second-quarter profit on Wednesday, led by sales of Jennie-O Turkey and international growth.
A 50% profit increase in Jennie-O Turkey and 10% and 9% improvements in grocery products and specialty foods, helped offset a sharp 25% decline in the company’s refrigerated foods segment.
Grocery products, which include its Spam brand, gained on lower pork and beef input costs as well as demand for Spam and MegaMex. Earnings in the refrigerated business, which includes deli meats under the brands Hormel and Natural Choice, fell on weak pork operating margins despite higher sales.
The packaged meat manufacturer reported earnings of $127.9 million, or 48 cents a share, compared with a year-earlier $109.6 million, or 40 cents.
The results were ahead of average analyst estimates of 42 cents in a Thomson Reuters poll.
Revenue for the three months ended April 29 was $2 billion, up slightly from $1.96 billion, narrowly below the Street’s view of $2.05 billion.
“This is a good example of our balanced business model in action, as we were able to increase earnings in four out of five segments.” Hormel CEO Jeffrey Ettinger said in a statement.
Hormel said it believes weak pork margins will be pulled up by strong results in other segments. It also forecasts higher sales as it continues advertising Hormel and Spam.
The company backed its full-year guidance in a range of $1.79 to $1.89 a share. Analysts are looking for a profit of $1.81.