Hormel Foods, buffeted by pork price changes and finicky shoppers, to report 3rd-qtr results

Earnings Preview: Hormel Foods Corp.

PORTLAND, Ore. — Hormel Foods Corp., the maker of Spam, Hormel chili and other foods, reports its third-quarter results before the market opens on Friday.

WHAT TO WATCH FOR: The company’s guidance for the remainder of the year and 2011.

Wall Street expects the company to post a profit for the quarter that ended in July. And Hormel raised its full-year guidance during its last quarterly report, saying it expects the strength of its brands to carry its business.

But Hormel has been facing major price fluctuations, particularly for hogs — which make up a large chunk of its business — and its margin could suffer.

The company also finicky shoppers. During the down economy, many Americans have moved to store brands then back and forth if food makers increase retail prices.

Even though consumers have been willing to walk away from higher-priced products like Hormel’s prepared foods and are less brand loyal, Hormel has been aggressive in its efforts to please shareholders.

The company recently announced it would buy back 5 million shares of its common stock.

WHY IT MATTERS: Because Hormel is a major U.S. food maker, its performance sheds light on how consumers are spending on necessities.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters, on average, expect the company to earn 59 cents per share on revenue of $1.7 billion.

LAST YEAR’S QUARTER: Last year, Hormel earned $77.2 million, or 57 cents per share, on revenue of $1.57 billion.