REUTERS
August 20, 2004

The Hormel Foods Corporation posted a 62 percent increase in quarterly profit yesterday, though higher grain costs kept profit below analysts' expectations.

The company also forecast a fourth-quarter profit below analysts' estimates, and its stock fell 6 percent.

"Even though we reported significant improvement over last year, higher grain prices substantially increased our cost of goods, particularly in our turkey operation," Joel W. Johnson, the chief executive, said in a news release.

The company, which makes Dinty Moore stew, Spam luncheon meat and Jennie-O turkey, said that its profit rose to $56.3 million, or 40 cents a share, from $34.7 million, or 25 cents a share, a year earlier.

Excluding the gain from the sale of the Vista International Packaging business, profit was 32 cents a share, 1 cent below analysts' forecast.

Sales in the period, which ended July 24 and was the third quarter of Hormel's fiscal year, rose 15 percent, to $1.16 billion.

For the fourth quarter, the company forecast a profit of 40 cents to 46 cents a share, below the average analyst estimate of 53 cents a share.

Stock in Hormel, which is based in Austin, Minn., fell $1.65, to $26.49 a share.

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