Hormel Foods Corp., which makes Spam canned ham, reported higher quarterly earnings on Tuesday as losses in the company's hog operations were offset by profit gains in other parts of the business.
A drought in the Midwest earlier this year led to higher grain costs, making livestock feed more expensive. Many meat companies reduced the size of their herds as a result.
Hormel, which also sells meats under its own name, credited growth in its premium "value-added" businesses for its performance in the fourth quarter ended on Oct. 28.
The company forecast fiscal 2013 earnings in line with Wall Street estimates, saying its Jennie-O Turkey business would suffer because of higher grain costs.
Hormel said it also planned to make additional cuts to its turkey and pork harvest levels during the year to reduce its exposure to volatile commodity markets.
The company said net income had risen to $132.6 million, or 49 cents per share, in the fourth quarter from $117.3 million, or 43 cents per share, a year earlier.
Net sales rose 3 percent to $2.17 billion, missing the analysts' average estimate of $2.23 billion, according to Thomson Reuters I/B/E/S. Sales by volume rose 2 percent.
The company forecast fiscal 2013 earnings of $1.90 to $2.00 per share. Analysts were expecting $1.95.
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