With such well-known items as Dinty Moore, Spam and Chi-Chi’s Mexican foodstuffs, Hormel Foods Corp. (HRL) confirmed before the markets opened on August 20 that the company’s profits surged during the period, despite an overall decline in sales and volume totals.

During the quarter, Hormel recorded net income of $77.2M, or $0.57 per share, in contrast to the previous year’s 3Q earnings of $51.9M, or $0.38 per share, an increase in net profits of just below 49%. Results were aided by higher profits from their refrigerated foods unit and gains from investments that performed better than expected.

Quarterly sales came in at $1.57B, down more than 6% from last year’s sales totals of $1.68B. Sales volumes retreated as well, slipping 4% year-over-year, as Hormel adjusted their international turkey production levels, due to global economies wreaking havoc within particular segments of the company.

Analysts within the industry were looking for the food product manufacturer to book net earnings of $0.52 per share with quarterly revenues totaling $1.7B.

Jeffrey Ettinger, President and CEO of Hormel, commented on the company’s performance, "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."

Despite the decline in sales, cash-conscious consumers have maintained their necessity purchasing habits and continued to stay home more instead of eating out.

Ettinger further added, "Our Grocery Products segment had another solid quarter, as increased sales of canned items more than offset the impact of discontinued sales of olive oil and soft sales of microwave products. Our Specialty Foods and All Other segments had weaker results."

Looking deeper into the company’s results, Hormel’s Refrigerated Foods unit constituted nearly 54% of the company’s net sales, bringing in $847.58M, albeit down 5% from a year ago. Operating profits from the segment amounted to $58.29M, up more than 60% since the previous year.

Within their Grocery Products unit, the company saw net sales drop more than 6% to $209M, representing 13% of net sales for the quarter. Operating income from the segment jumped more than 11% year-over-year to $33.22M, with much of the success going to increased sales of Spam products, Hormel chili and Herdez foodstuff.

The Jennie-O Turkey Store saw quarterly sales decline 5% from the previous year, bringing in $295.4M in net sales, 19% of Hormel’s overall sales totals. Despite the decrease in sales, operating profits from the unit surged 97% year-over-year to $15.92M. The decline in sales was directly attributed to an increase in commodity meat prices, reducing the company’s exposure rate.

Hormel’s Specialty Foods segment, which has Diamond Crystal Brands as its flagship, saw a 13% decrease in net sales, totaling $167.2M. Overall sales corresponded to 11% of the company’s net sales for the period. Profits from operation within the unit slipped a little more than 2% year-over-year, bringing in $16.49M in revenues.

Through the first three quarters of the year, Hormel has recorded net income of $238.94M, or $1.76 per share, in comparison to earnings of $217.69M, or $1.58 per share during the same period a year ago, an increase in profits of nearly 10%. Sales, meanwhile, inched lower over the first nine months, tallying $4.86B, down 0.6% from $4.89B.

Heading into the end of fiscal 2009, Hormel reaffirmed their yearly outlook in which earnings are expected to come in between $2.36 and $2.42 per share. Analysts are projecting annual earnings for the company to be $2.41 per share. Hormel had recently adjusted their earnings forecast upwards in early August, from a range of $2.15 to $2.25 per share, citing stronger-than-anticipated results for the current 3Q.

By the sound of the closing bell on August 20, shares of Hormel gained 0.5%, or $0.20, to conclude the session at $37.44 per share. During the course of year, HRL shares have traded as low as $24.81 and as high as $39.04 per share. With the company’s closing price, shares of Hormel sit only 4.1% below their yearly high.