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Hormel Foods Corporation (HRL - Analyst Report), a food company, posted earnings per share of 42 cents in the third quarter of fiscal 2013 (ended July 28, 2013), a penny higher than the year-ago quarter. However, earnings missed the Zacks Consensus Estimate of 44 cents by 4.5%.

Sales: Hormel’s net sales for the reported quarter were $2,159.5 million, up 7.5% year over year. Revenues also beat the Zacks Consensus Estimate of $2,127.0 million. The year-over-year increase was mainly led by a hike in all the segments, accompanied by the recently acquired Skippy peanut butter line. Total volume was up 3.0% year over year.

During the reported quarter, revenues from Grocery Products improved 24.6% year over year to $370.3 million, while Jennie-O Turkey Store witnessed a revenue rise of 4.4% to $367.1 million. The Refrigerated Foods segment’s revenues increased 2.2% year over year to $1,068.6 million. Similarly, Specialty Foods revenues grew 4.5% to $240.5 million while revenues from International & Other segment swelled 31.4% to $113.0 million during the reported quarter.

Income/Costs: Hormel’s gross profit for the third quarter of fiscal 2013 was $330.3 million, up 7.6% from $307.1 million in the comparable quarter last year. Operating profit margin in the quarter decreased roughly 19 basis points year over year to 8.4%.

Operating profits for Grocery Products for the reported quarter increased 32.2%, while Jennie-O Turkey Store registered a rise of 16.7% year over year. Operating profits for the Refrigerated Foods segment decreased 26.3% in the quarter. Operating profit for Specialty Foods jumped 7.8% and International & Other segment’s profit surged 34.2% year over year.

Balance Sheet: At the end of the reported quarter, the company recorded cash and cash equivalents of $329.5 million, up from $262.7 million at the end of the preceding quarter. Long-term debt (less current maturities) stood at $250.0 million at the end of the quarter, flat compared with the preceding quarter.

The company paid a quarterly dividend at an annual rate of 68 cents per share on Aug 15, 2013, representing the 340th straight dividend payout by the company.

Outlook: In view of the current quarter results, management expects to achieve its previous earnings guidance in the range of $1.88 to $1.96 per share in fiscal 2013. It is expected that all the segments, except Specialty Foods, will grow in the fourth quarter of fiscal 2013. Jennie-O Turkey Store segment, which experienced difficult times in the year are expected to rebound in the next quarter, boosting the total revenue as well as earnings.

Other Stocks to Consider

Pilgrim's Pride Corporation (PPC - Snapshot Report) announced second-quarter 2013 operating earnings of 74 cents per share, beating the Zacks Consensus Estimate of 56 cents by 32.1%.

Tyson Foods, Inc. (TSN - Analyst Report) announced fiscal third-quarter 2013 operating earnings of 69 cents per share, beating the Zacks Consensus Estimate of 59 cents by 17.0%.

Hillshire Brands Company (HSH - Snapshot Report) announced fiscal fourth-quarter 2013 operating earnings of 26 cents per share, beating the Zacks Consensus Estimate of 24 cents by 8.3%.

Hormel currently holds a Zacks Rank #4 (Sell).

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