AUSTIN, Minn. (AP) — Hormel Foods’ fiscal second-quarter net income fell 2 percent as it dealt with one-time costs related to its acquisition of the Skippy peanut butter brand, higher grain costs and weaker turkey prices.
Its quarterly performance missed Wall Street’s expectations.READ MORE: Clean Car Debate At Minnesota Capitol May Lead To Summer Closures Of State Parks, Trails
The meat producer, known for Spam and other cured, smoked and deli meats, earned $125.5 million, or 46 cents per share, for the three months ended April 28. That compares with $127.9 million, or 48 cents per share, a year earlier.
Analysts predicted earnings of 49 cents per share, according to a FactSet survey.
The current quarter included about $9 million in one-time costs related to the Skippy deal. Hormel Foods Corp. agreed to buy Skippy in January from Unilever for $700 million.
Revenue rose 7 percent to $2.15 billion from $2.01 billion, but fell short of the $2.19 billion that Wall Street expected.
Revenue from the refrigerated foods segment, which comprises nearly half of Hormel’s total revenue, fell 2 percent to $1.01 billion due to increased grain costs.READ MORE: Marietta's Salt Lake Is A Paradise For Birds And Bird Watchers
Grocery products revenue, which includes Spam and makes up 18 percent of total revenue, climbed 49 percent to $393.5 million thanks to the Skippy transaction and better sales of products such as Dinty Moore stew, Spam and Mary Kitchen hash.
Specialty foods revenue increased 7 percent to $245.7 million, while international and other revenue rose 21 percent to $117.4 million partly because of increased sales of Spam products.
Revenue from Jennie-O Turkey Store, which makes up 18 percent of revenue, declined about 2 percent to $384.7 million on higher grain costs and weaker commodity turkey prices.
The Austin, Minn., company still foresees full-year earnings of $1.93 to $2.03 per share. Analysts expect $1.99 per share.
Hormel shares finished at $42.40 on Wednesday. They have traded in a 52-week range of $27.28 to $43.17.MORE NEWS: COVID In MN: Gov. Walz To Announce On Thursday His Timeline To End All Restrictions
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