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Published August 20, 2010, 08:25 AM

Hormel 3rd-quarter net income rises

AUSTIN, Minn. — Hormel Foods Corp. said strong sales of its grocery products such as Hormel Chili helped its net income rise 11 percent in the third quarter despite higher commodity costs.

AUSTIN, Minn. — Hormel Foods Corp. said strong sales of its grocery products such as Hormel Chili helped its net income rise 11 percent in the third quarter despite higher commodity costs.

The maker of Spam, Dinty Moore and other foods on Friday raised its earnings guidance for the year on the results.

Net income rose to $85.4 million, or 63 cents per share. That’s up from $77.2 million, or 57 cents per share, last year. Analysts polled by Thomson Reuters, on average, expected a smaller 60 cents per share.

Revenue rose 10 percent to $1.73 billion from $1.57 billion last year. Analysts expected $1.7 billion.

Hormel, like many food makers, has been dealing with rising prices for grain and other commodities.

Revenue from Hormel’s refrigerated foods, including Hormel party trays and Lloyd’s Barbeque products, rose 12 percent.

Revenue from its grocery products such as Hormel Chili also rose 12 percent, but operating profit fell 23 percent because of higher raw material costs.

Jenny-O Turkey revenue was flat, but segment profit nearly doubled because of cost-cutting and better commodity pricing.

The company now expects net income, excluding one-time items, of $2.85 to $2.91 per share, from prior guidance of $2.75 to $2.85 per share. Analysts expect net income of $2.84 per share. Analyst estimates typically exclude one-time items.

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