Hormel Foods Profit Falls 33% on Turkey-Feed Costs

[seemslikeadream]

http://www.bloomberg.com/apps/news?pid=20601103&sid=aQmbiIfZ4.U4&refer=us

By Choy Leng Yeong

Nov. 25 (Bloomberg) -- Hormel Foods Corp., the second- largest U.S. turkey processor, said profit in its fiscal fourth quarter fell 33 percent because of higher costs for feed and fuel at its Jennie-O Turkey Store unit.

Net income dropped to $67.8 million, or 50 cents a share, in the three months through Oct. 26, from $101.2 million, or 73 cents, a year earlier, Austin, Minnesota-based Hormel said today in a statement. Profit topped the 48-cent average estimate of eight analysts surveyed by Bloomberg. Sales gained 12 percent to $1.86 billion.

Chief Executive Officer Jeffrey Ettinger said today that turkey production was unprofitable as an oversupply of breast meat kept prices too low to make up for the higher cost of feed grain. The company forecast 2009 earnings that trailed analysts’ estimates because of expectations the trends will continue.

The profit decline is “primarily due to the weakness in food-service and the turkey business,” Farha Aslam, an analyst at Stephens Inc., said in a Nov. 21 report. “We expect more cuts to be announced from the industry in the next coming months.”

Hormel fell 19 cents to $29.05 as of 9:57 a.m. in New York Stock Exchange composite trading. The shares declined 28 percent this year through yesterday.

Operating profit in the turkey unit, which accounted for 19 percent of fiscal 2008 sales, fell 44 percent to $23.7 million as grain and fuel costs rose $40 million.

‘Industrywide Oversupply’

[lapfog_1]

1. On the other hand...

I understand that this product from Hormel is doing very very well right now...



So maybe their stock will rebound.

[damntexdem]

2. Turkey feed costs? Why is Hormel having to feed the Republican Party?

Oh, THAT type of turkey feed for THAT type of turkey! ;-)