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Don’t eat the meat! Hormel recalls food products again

Meat giant Hormel Foods (HRL) is in limelight again. Nearly 230,000 pounds of canned pork and chicken products have been recalled after consumers found metal shavings in them. In a few instances, the metal objects even led to minor oral injuries.

The firm, which recently acquired Brazilian meat company Creatti, said the problem with “SPAM Classic” and “Hormel Foods Black-Label Luncheon Loaf” came to light after consumers reported the issue to the US Department of Agriculture’s Food Safety and Inspection Service (FSIS) wing. The products recalled were made between February 8 and February 10, 2018, at its Fremont plant.

Similarly, in 2015, the company had recalled peanut butter spread jars due to the presence of metal objects.

Nearly 230,000 pounds of canned pork and chicken products have been recalled after consumers found metal shavings in them.

The Austin-based company had last week reported lower-than-expected growth in second-quarter sales and earnings. On May 24, the company reported earnings that rose 13% to $0.44 a share, however, missing the consensus estimate of $0.45 a share.

Revenues rose 7% to $2.33 billion but came below the street estimate of $2.37 billion. The increase was driven by the recent acquisitions of Ceratti, Columbus Craft Meats, and Fontanini. The company’s refrigerated foods segment reported 14% increase in sales and the international segment delivered sales growth of 22%. Meanwhile, sales at its popular Jennie-O Turkey store fell 4% due to lower whole bird pricing and volume.

During the quarter, the company witnessed a double-digit increase in per-unit freight costs, due to both the lack of availability of trucks and an increase in diesel fuel surcharges. The company expects rising freight costs to continue even in the second half of 2018 and into 2019.

Hormel Foods earnings infographic
Hormel Foods Q2 2018 Earnings Infographic

The company affirmed its fiscal 2018 outlook. It expects EPS of about $1.81 to $1.95 and revenue of about $9.70 billion to $10.10 billion.

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