Hormel Foods Corp. will book a charge of 5 cents per share to its second-quarter earnings as health care reform legislation reduces tax deductions on prescription drug benefits for its retirees.
Several companies have said they will take accounting charges due to the health care reform bill, including AT&T, Boeing, AK Steel Corp., Caterpillar Inc. and 3M Co. Accounting rules require that companies take the charges during the period the legislation is enacted.
The maker of Spam, Dinty Moore stew and other foods will update its guidance to include the charge, as well as a separate cost of 5 cents per share for closing a plant, when it reports its second-quarter earnings on May 19.
Hormel shares fell 18 cents to $40.01 during afternoon trading.