Hormel Foods Q3 Earnings Beat Street; Slashes Annual Sales Outlook; Stock Down In Pre-market

(RTTNews) - Hormel Foods Corporation (HRL), a food processing company, Wednesday reported higher profit for the third quarter, despite decline in revenue. Earnings beat the Street view while revenue missed.

The company also cut its full-year sales outlook to reflect lower-than-expected commodity markets, production disruptions at its Suffolk, Virginia, facility, and declines in its contract manufacturing business. Hormel Foods shares were down more than 5 percent in pre-market.

Net income for the third quarter increased to $176.70 million or $0.32 per share from $162.68 million or $0.30 per share a year ago, primarily due to lower expenses.

Excluding one-time items, earnings were $200.59 million or $0.37 per share, that beat the analysts' average estimate of $0.36 per share. Analysts' estimates typically exclude special items.

Operating income increased to $236.69 million from $216.76 million last year, while adjusted operating income decreased to $267.2 million from $286.76 million.

Sales for the quarter declined to $2.898 billion from $2.963 billion in the previous year. The consensus estimate was for $2.95 billion.

For the full year, the company now expects sales to be in the range of $11.8 billion - $12.1 billion, down from the previous outlook of $12.2 billion - $12.5 billion. Adjusted EPS outlook range has been narrowed to $1.57 - $1.63 from $1.55 - $1.65 guided earlier.

Analysts expect the company to report earnings of $1.6 per share on revenue of $12.14 billion.

Hormel Foods stock had closed at $33.14, up 1.81 percent on Tuesday. It has traded in the range of $28.51 - $39.58 in the last 1 year.