Hormel Foods Corporation (HRL), a well-known food processing company, announced an increase in profit for the third quarter on Wednesday, despite a decline in revenue. The company reported earnings that surpassed analyst expectations, albeit with revenues that fell short.
The company has revised its full-year sales forecast downward, citing weaker commodity markets, production issues at its Suffolk, Virginia facility, and a downturn in its contract manufacturing operations. As a result, Hormel Foods shares dropped over 5 percent in pre-market trading.
For the third quarter, net income rose to $176.70 million, or $0.32 per share, up from $162.68 million, or $0.30 per share, from the same period last year, mainly attributed to reduced expenses.
When excluding one-time items, earnings were $200.59 million, or $0.37 per share, surpassing the analysts' average estimate of $0.36 per share. Typically, analysts' estimates do not include special items.
Operating income grew to $236.69 million, compared to $216.76 million last year. However, adjusted operating income fell to $267.2 million from $286.76 million.
Quarterly sales dropped to $2.898 billion from $2.963 billion in the prior year, missing the consensus estimate of $2.95 billion.
For the full year, Hormel Foods now projects sales to range between $11.8 billion and $12.1 billion, down from the previous forecast of $12.2 billion to $12.5 billion. The adjusted EPS outlook has been refined to a range of $1.57 to $1.63, from the earlier guidance of $1.55 to $1.65.
Analysts are anticipating the company to report earnings of $1.6 per share on revenues of $12.14 billion.
On Tuesday, Hormel Foods stock closed at $33.14, reflecting a 1.81 percent increase. Over the past year, the stock has fluctuated between $28.51 and $39.58.
