Aug. 20--Despite difficult terrain and low sales numbers, Hormel Foods Corp. is staying on pace to deliver on its forecast of better-than-expected 2009 earnings.

The Austin-based Fortune 500 food giant's third quarter earnings report this morning backed up its announcement last week that 2009 is going to exceed its earlier expectations.

Earnings for the quarter were up by 50 percent, to 57 cents a share from 38 cents share in the same quarter in 2008. The net earnings for the quarter is $77 million, a big jump from last year's $51.9 million.

Analysts polled by Thomson Reuters had predicted 52 cents per share in profit.

Revenue fell 6 percent to $1.57 billion from $1.68 billion. Analysts had expected $1.7 billion.

Much of the gains came from positive results from two segments -- refrigerated foods and Jennie-O Store -- that previously have taken big hits in the rough economy.

"Our refrigerated foods segment rebounded to post higher earnings on an enhanced sales mix and lower costs, despite weak cutout margins during much of the quarter. Our Jennie-O Turkey Store segment also showed continued improvement in the quarter," wrote CEO and President Jeffrey M. Ettinger in today's announcement.

Refrigerated foods' operating profit climbed by 60 percent compared to 2008, while profit from Jennie-O's birds soared 97 percent.

Counterbalancing those big numbers is the sobering fact that Jennie-O's profit was down 61 percent in 2008's third quarter because of a whopping $53 million increase in feed costs; refrigerated foods was down by 1 percent.

Despite the better profit numbers for this quarter, sales for the company overall were down by 6 percent, to $1.6 billion.

A major factor for this, Hormel officials say, is subtraction of sales of Carapelli olive oil following the end of that joint venture as well as reductions of turkey production for international sales.

A continuing trend of people eating more at home benefited the grocery products segment yet again, despite "soft sales" of its previously strong Home Compleats microwave meals products.

The segment reported an increase in operating profit by 11 percent, much of that built on strong sales of Spam, Hormel chili and Herdez food products.

Ettinger characterized all of this as meaning Hormel is on track to hit its recently increased annual 2009 earnings forecast to the range of $2.36 to $2.42 per share.

"Although we are faced with challenges including the weak economy, a continued excess supply of commodity turkey meat, and difficult export markets, our balanced business model, continued strength in our core franchise products ... should allow us to deliver an excellent year," he said.

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