The stock for Hormel Foods Corp., the Austin-based maker of Spam luncheon meat and Jennie-O Turkey Store products, fell the most since August 2011 after saying profit in its current year will be less than previously forecast amid rising costs.
The shares dropped 4.9 percent to $38.64 at 10:25 a.m. in New York, after earlier trading at $38.58 for the biggest intraday decline since Aug. 25, 2011. The stock had climbed 30 percent this year, compared with a 15 percent gain for the Standard & Poor’s 500 Index, according to Bloomberg.
"Lower than expected results in our pork operations, higher input costs and softer sales of our retail products in our Refrigerated Foods segment are the primary reason for the expected shortfall in our second half results," CEO Jeffrey Ettinger said in a statement.
Hormel lowered its earnings guidance to a range of $1.88 to $1.96 per share from the prior forecast in the range of $1.93 to $2.03 per share, according to RRT news.
On average, nine analysts polled by Thomson Reuters expect the company to report earnings of $1.99 per share for fiscal 2013. Analysts' estimates typically exclude special items, RTT reports.
In late May, the company had reported earnings and sale for the second quarter that missed analysts' expectations. However, the company then maintained its earnings guidance for the full-year 2013.
According to the Star Tribune, higher feed costs in its turkey and pork businesses hurt Hormel during its second quarter, when profits were down 2 percent over a year earlier. Still, Hormel said in May that grain costs — the key ingredient in feed — were moderating.