Hormel plant closure may affect Q2 earnings

The closure of Hormel Foods' Turlock, California, Valley Fresh canned meats plant by October 29, is seen to result in a one-time charge to fiscal 2010 second quarter earnings per share of approximately five cents

According to Mike Devine, vice president of Grocery Products Operations, the manufacture of the Valley Fresh canned products will be moved to another facility.

Hormel's fiscal second quarter will be impacted by another one-time charge of approximately five cents per share, resulting from the recently enacted Patient Protection and Affordable Care Act, including modifications made in the Health Care and Education Reconciliation Act of 2010.

This charge is due primarily to a reduction in the value of the company's deferred tax asset as a result of a change to the tax treatment of Medicare Part D reimbursements.

The company's 2010 earnings guidance, as provided in Hormel's Form 8-K dated February 18, 2010, did not include either of these charges. Revised guidance incorporating the impact of both of these charges will be provided in Hormel's fiscal 2010 second quarter earnings release on May 19.