Spam drives up Hormel 4Q profits

AUSTIN, Minn. (AP) -- Continued strong sales of Spam and Jennie-O products helped Hormel Foods as its net income climbed 13 percent in its fourth fiscal quarter.

The Austin, Minn., company also increased its annual dividend by 13 percent to 68 cents per share.

But both its earnings and revenue were below Wall Street expectations and its shares slipped 29 cents to $31.01 in premarket trading.

For the period ended Oct. 28, the food company reported Tuesday that it earned $132.6 million, or 49 cents per share, up from $117.3 million, or 43 cents per share a year earlier.

Analyst expected slightly higher earnings of 50 cents per share, according to a FactSet poll.

Revenue rose 3 percent to $2.17 billion from $2.1 billion. Wall Street forecast $2.23 billion in revenue.

The Jennie-O Turkey Store unit, which makes up 20 percent of the company's revenue, reported a 5 percent sales increase thanks to better sales of its fresh tray pack products, turkey bacon and turkey burgers. Sales for the grocery products unit climbed 21 percent due to strong Spam sales, sales of Hormel chili and its MegaMex Foods joint venture. The segment comprises 16 percent of total sales.

The bulk of Hormel's sales, 49 percent, come from the refrigerated foods segment. Its sales fell 3 percent on lower meat prices.

Hormel Foods Corp. said its full-year net income climbed 6 percent to $500.1 million, or $1.86 per share, from $474.2 million, or $1.74 per share, in the prior year. Annual revenue increased 4 percent to $8.23 billion from $7.9 billion.

For 2013, Hormel predicts earnings of $1.90 to $2 per share. Analysts foresee earnings of $1.95 per share.

The company said its latest dividend increase marked the 47th straight year that it has raised its dividend. It will pay a quarterly dividend of 17 cents per share. The dividend will be paid on Feb. 15, 2013 to shareholders of record on Jan. 21, 2013. This will be the 338th consecutive quarterly dividend paid by Hormel.