On Feb. 27, Hormel Foods (NYSE:HRL) released Q1 2006 earnings for the period ending Jan. 29, 2006.

  • Revenue increased more than 11%, beating expectations.
  • Gross margins rose, but operating margins fell on higher selling costs.
  • An increase in prepaid expenses and a decrease in accounts payable negatively affected both cash flow from operations and free cash flow.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q1 2006

Q1 2005

% Change

Sales

$1,380

$1,416

$1,271

11.4

Net Profit

--

$69

$65

7.2

EPS

$0.48

$0.50

$0.46

8.7



Get back to basics with a look at the income statement.

Margin Checkup

Q1 2006

Q1 2005

Change

Gross Margin

24.93%

24.54%

0.39

Op. Margin

7.46%

8.25%

(0.79)

Net Margin

4.89%

5.08%

(0.19)



Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2006

Q1 2005

% Change

Cash+ ST Invest.

$130

$170

(23)

Inventory

$535

$535

0.1

Accounts Rec.

$274

$301

(9)


Liabilities

Q1 2006

Q1 2005

% Change

Long-Term Debt

$350

$350

0

Current Liabs.

$517

$583

(11.4)



Inventories at work.

Cash Flow Highlights

Q1 2006

Q1 2005

% Change

Cash From Ops

$13

$80

(83.8)

Capital Expend.

$25.43

$24.76

2.7

Free Cash Flow

($12)

$55

N/A



Related Companies:

  • Campbell Soup (NYSE:CPB)
  • ConAgra Foods (NYSE:CAG)
  • Kraft Foods (NYSE:KFT)
  • Sara Lee (NYSE:SLE)
  • Tyson Foods (NYSE:TSN)
  • Unilever (NYSE:UL)

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool analyst Andy Cross did not own shares in any company mentioned above. Fool rules are here.