Hormel Foods Corporation (HRL) has reported a marginal increase of a 0.04 percent in profit for the quarter ended Jan. 29, 2017. The company has earned $235.15 million, or $0.44 a share, compared with $235.06 million or $0.43 a share, a year ago.
Revenue during the quarter went down marginally by 0.54 percent to $2,280.23 million from $2,292.67 million in the previous year period. Gross margin for the quarter contracted 12 basis points over the previous year period to 24.22 percent. Total expenses were 84.42 percent of quarterly revenues, up from 84.32 percent for the same period last year. That has resulted in a contraction of 10 basis points in operating margin to 15.58 percent.
Operating income for the quarter was $355.36 million, compared with $359.54 million in the previous year period.
"I'm proud of our team's ability to drive earnings growth for the 15th consecutive quarter," said Jim Snee, president and chief executive officer. "Our adjusted sales and volume performance for the quarter was solid with sales up 3 percent and volume up 5 percent."
For financial year 2017, the company projects diluted earnings per share to be in the range of $1.65 to $1.71.
Operating cash flow drops significantly
Hormel Foods Corporation has generated cash of $177.62 million from operating activities during the quarter, down 36.27 percent or $ 101.07 million, when compared with the last year period.
Cash flow from investing activities was $105.57 million for the quarter as against cash outgo of $20.98 million in the last year period.
The company has spent $82.19 million cash to carry out financing activities during the quarter as against cash outgo of $227.47 million in the last year period.
Cash and cash equivalents stood at $609.82 million as on Jan. 29, 2017, up 62.53 percent or $234.61 million from $375.22 million on Jan. 24, 2016.
Working capital increases sharply
Hormel Foods Corporation has recorded an increase in the working capital over the last year. It stood at $1,199.82 million as at Jan. 29, 2017, up 29.57 percent or $273.84 million from $925.99 million on Jan. 24, 2016. Current ratio was at 2.30 as on Jan. 29, 2017, up from 1.91 on Jan. 24, 2016.
Days sales outstanding were almost stable at 23 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 25 days for the quarter compared with 52 days for the previous year period.
Debt remains stable
Total debt remained stable at $250 million as on Jan. 29, 2017, when compared with the last year. Long-term debt remained stable at $250 million as on Jan. 29, 2017, when compared with the last year. Total debt was 3.93 percent of total assets as on Jan. 29, 2017, compared with 4.14 percent on Jan. 24, 2016. Debt to equity ratio was almost stable at 0.05 as on Jan. 29, 2017, when compared with the last year. Interest coverage ratio improved to 117.44 for the quarter from 105.53 for the same period last year.
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