Smithfield Foods Profit Doubles as Beef Prices Rebound
Meat producer Smithfield FoodsThursday reported higher quarterly earnings, as higher pork and beef sales, offset higher grain costs.
For the first quarter ended on July 29, profit increased to $54.5 million, or 41 cents a share, from $24.6 million, or 22 cents a share, a year earlier.
Income from continuing operations rose to 47 cents a share from 36 cents.
Quarterly sales rose 21 percent to $3.36 billion, the Smithfield, Virginia-based company said in a statement.
Analysts, on average, had forecast earnings of 42 cents a share, on revenue of $3.28 billion, according to Reuters Estimates.
Smithfield has the largest U.S. hog herd and is the world's largest pork producer. It also produces beef and turkey and is part-owner of the nation's largest cattle feedlot.
The company also noted that its second and third quarters are seasonally good for pork sales, due to the fall holiday period.
"The live hog market remains strong and if the futures markets are any indication, they should remain strong for the next six to twelve months," said Chief Executive Larry Pope, in a statement.
Pope added that he was "reasonably optimistic" about the remainder of fiscal 2008.
However, Smithfield also reported a third outbreak of classical swine fever at a company-owned farm in Romania. The company had previously said that inventory write-down and disposal costs associated with the first two outbreaks would have a $4 million to $5 million impact in the second quarter.
However, given the third outbreak inventory write-down and disposal costs are expected to exceed the previously reported level, the company said. The revised cost estimate has not yet been determined.
"This most recent setback in Romania is disappointing and will certainly impact our results in that country for some time going forward. However, we remain committed to our Romanian strategy," said Pope.