August 11, 2009

Hormel Foods Corp. boosted its fiscal-year earnings outlook, citing solid performances from numerous segments, including improvement in its long-struggling Jennie-O operations.

The raised view comes as the meat industry, like many others, deals with a demand slump and oversupply woes that have forced producers, processors and supermarkets to cut production and prices.

The maker of SPAM luncheon meat now expects profit of US$2.36 to US$2.42 a share. The company in May projected earnings at the high end of its US$2.15 to US$2.25 a share target.

Hormel said the boost was led by a strong performance for its refrigerated-foods business, the grocery segment and improvement at Jennie-O.

The turkey operations were hurt for some time by sharply higher feed costs, a bane to many meat producers the past several years, but commodity costs have fallen sharply the past year.

In May, Hormel posted a 3.6-percent rise in fiscal second-quarter profit on a gain from a dissolved joint venture, as production cuts helped offset falling volume.

But chairman and chief executive officer Jeffrey M. Ettinger said the company had seen improvement in sales of some convenience-food items.

The company will provide more details when it releases its fiscal third-quarter results on August 20.