NEW YORK (
) -- Shares of
are tacking on gains after the food processor beat on both the top and bottom lines and forecast guidance that was above Wall Street estimates.
Shares of Hormel Foods have risen 3.3% to $49.50 in morning trading.
After reporting strong fourth-quarter earnings Tuesday and announcing on Monday the increase of its annual dividend to $1.02 a share from 84 cents a share, Hormel Foods said it was setting its full-year guidance in the range of $3.10 to $3.20 a share vs. the consensus expectation of $3.04.
Flashback: Ignore Goldman, Hormel Is Still a 'Buy' >>
The company said it sees "solid top-line momentum" heading into the new fiscal year driven by profit growth in all five of its business segments; its pork and turkey business remain especially strong, Hormel added. However, the company warns of headwinds caused by higher raw material costs, higher grain costs and a more difficult comparison due to an extra week in fiscal 2010.
For the fiscal fourth quarter ended Oct. 31, Hormel posted net earnings increase of 17% to $121.1 million, or 90 cents a share, from $103.9 million, or 77 cents a share, the previous year. Fourth-quarter net sales grew about 23.2% to $2.06 billion from about $1.68 billion a year earlier. Both the top line and bottom line easily beat the consensus earnings expectation of 79 cents on revenue of $1.88 billion.
In the fourth quarter, Hormel's groceries segment profit declined 6% mainly due to higher raw material costs; segment operating profit for refrigerated foods were up 22% driven by strong pork operating margins; segment operating profit for Hormel's Jennie-O Turkey Store were up 90%, driven increased operational and supply chain efficiencies; profit from the specialty foods segment's fell 6% due to higher raw material costs and segment profit for the "all other" segment, which consists primarily of Hormel's international operations, fell 3%, hindered by higher input costs, the company said.
-- Written by Andrea Tse in New York.
>To contact the writer of this article, click here:
>To follow the writer on Twitter, go to
>To submit a news tip, send an email to:
Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.