Hormel Foods Corporation (HRL) reported better-than-expected earnings for the fourth quarter of 2018 but revenue came short of estimates. Shares dropped around 2.7% in morning trade on Tuesday.
Net sales improved 1% to $2.52 billion from the year-ago period but missed the consensus estimate of $2.57 billion. On an organic basis, net sales fell 3%.
Net earnings attributable to Hormel Foods Corporation improved to $261.4 million, or $0.48 per share, from $218.1 million, or $0.41 per share, in the prior-year period. Adjusted EPS rose 24% to $0.51, coming ahead of the projections of $0.46.
During the quarter, Hormel posted sales and volume increases in its Refrigerated Foods and International & Other segments. This growth was driven by strength in branded products such as Hormel pepperoni, benefits from the Columbus and Fontanini acquisitions, higher exports of SPAM luncheon meat and Skippy peanut butter and the addition of the Ceratti business.
The company saw decreases in sales and volume in the Grocery Products segment and the Jennie-O Turkey Store segment, hurt by declines in the contract manufacturing business as well as lower whole bird volume and sales.
For the full year of 2019, Hormel expects net sales to come in the range of $9.70 billion to $10.20 billion and EPS to come in a range of $1.77 to $1.91. The company expects strength in top brands such as Wholly Guacamole, Applegate, Jennie-O and SPAM to drive growth in 2019.
Hormel announced a 12% increase in its annual dividend, bringing the new dividend to $0.84 per share.