AUSTIN, Minn. (AP) — Foodmaker Hormel Foods Corp. reported a fiscal first-quarter profit on Thursday that fell 14 percent as it was squeezed by high pork prices and sales volumes fell 2 percent.
Hormel, which makes Spam, deli meats and other food products, earned $128.4 million, or 48 cents per share, for the quarter that ended Jan. 29. That was down from $148.8 million, or 55 cents per share, during the quarter ending Jan. 30 last year.
Revenue rose 6 percent to $2.04 billion from $1.92 billion despite the decline in sales volumes. Hormel has been raising prices to offset higher costs. The cost of making its foods rose 10 percent in the quarter to $1.7 billion.
The company's quarterly net income and revenue both matched the expectations of analysts surveyed by FactSet.
More than half of Hormel's revenue comes from its refrigerated foods segment, which includes pepperoni, Natural Choice deli meats, and Country Crock side dishes like mashed potatoes and macaroni and cheese. Profit in that division dropped 44 percent, despite a 7 percent bump in revenue, because its pork products weren't as profitable. Hormel said in November that the price it's paying for pork has been high.
Costs for raw materials also hurt other units. Operating profit in the company's grocery division, whose products include Spam, chili and salsa, fell 9 percent. Customers also bought fewer products.
Operating profit rose 4 percent in its Jennie-O Turkey Store unit, which makes up 19 percent of Hormel revenue.
The company predicted "challenging" conditions for this year, although it expects its profitability on pork products to improve.
It repeated a profit outlook of $1.79 to $1.89 per share for the year, which ends in October. Analysts have been expecting the Austin, Minn., company to earn $1.82 per share.
Hormel shares closed at $29.04 on Wednesday. They weren't active in premarket trading.