Meat + Poultry - September 2006 - 12

Business Notes
Grocery segment fuels Hormel third quarter earnings
While other publicly traded protein companies like Tyson Foods, Smithfield Foods
and Pilgrim's Pride have recently announced sluggish financial results, Hormel
Foods Corp., Austin, Minn., continues generating strong earnings. For the third quarter ended
July 30, Hormel posted net income of $59.6 million, equal to $0.43 per share on the common
stock, compared with $51.8 million, or $0.38
per share, in the same period last year. Sales for the quarter were $1.41 billion during the third quarter compared with $1.36 billion last year.
Thirty-nine weeks into fiscal 2006, Hormel Foods reported a net income of
$196.1 million, or $1.42 per share, compared with $172.4 million, or $1.25 per
share. Sales for the fi rst three quarters were $4.19 billion, which compared with
$3.94 billion.
The company's Grocery Product segment, which represents 14 percent of net
sales, represented 28 percent of Hormel's operating profit for the quarter. Hormel chili and the microwave category were key contributors with double-digit
sales growth, according to the company. Other growth areas were from sales
of bacon bits and hash.
Meanwhile, the Jennie-O Turkey Store segment saw its operating profit decline
due to higher energy costs and lower return on thigh meat compared to a year ago,
the company reports. Segment volume was down 6 percent due to a reduction in
the number of live birds processed and lower commodity sales.
"Fiscal 2006 is shaping up to be another good year for Hormel Foods," said Jeffrey Ettinger, president and C.E.O. "In the first three quarters, our segments have
executed on the strategy to grow the value-added business and strengthen our
brands. However, we will be facing a difficult fourth-quarter comparison because
of the exceptional results delivered by Jennie-O Turkey Store last year."

Information sharing is the goal of
avian influenza consortium
A group of researchers from around the world have combined their efforts by
forming a consortium designed to improve the sharing of influenza data, analyze data findings jointly, and publish the results collaboratively as part of the
Global Initiative on Sharing Avian Influenza Data. The group is coming together to work around restrictions that have prevented influenza information
sharing, with the hope more shared information will help researchers understand how viruses spread, evolve, and potentially become pandemic.
Data collected under the initiative will be deposited in three publicly available databases participating in the International Sequence Database Collaboration. The three databases participating are in the International Sequence
Database Collaboration and include EBML in the United Kingdom, DDBJ in
Japan, and the U.S.-based GenBank.
The consortium is designed to span scientific disciplines, with researchers
in the fields of veterinary medicine and human medicine, and is open to all
scientists, provided they agree to share their own data, credit the use of others' data, analyze findings jointly, and publish results collaboratively.
12

MEAT&POULTRY

September 2006

www.MEATPOULTRY.com

Vantage Foods to open
case-ready N.C. facility
Vantage Foods, Inc. will open
a new case-ready meat service
center in Caldwell County, N.C.
The facility is expected to open
in May 2007 and will employ approximately 200 people when fully
operational.
Vantage Foods has signed a
long-term supply contract with
Alex Lee, Inc., Hickory, N.C., to
supply the company's retail banner, Lowes Foods, and its foodservice distribution company, Institution Food House, Inc., from this
new facility.
Leonal Kilgore, president of
Vantage Foods US, Wichita, Kan.,
will assume executive responsibility for the North Carolina
operation.

Smithfield remains in
acquisition mode
Smithfield Foods, Inc., Smithfield,
Va., most likely will continue to
focus on expansion under its new
chief executive, according to news
reports from the company's annual meeting this past month. Larry
Pope, who officially took over as
C.E.O. for Joe Luter Sept. 1, said
Smithfield would be interested in
the Oscar Mayer division of Kraft
Foods Inc., Northfield, Ill., if it became available.
Rumors have circulated that
Kraft's parent company, Altria
Group Inc., New York City, may
soon spin off the company of
which it is majority stockholder.
"Oscar Mayer is the only piece
of that that we would have any interest in at all," said Pope. "That's
probably going to go at a price we
are not going to like."

http://www.MEATPOULTRY.com

Meat + Poultry - September 2006

Table of Contents for the Digital Edition of Meat + Poultry - September 2006