Economic downturn affects Agfeed
Shares of AgFeed Industries fell to their lowest in
almost in two years after the animal-feed and pork company slashed its full-year
profit outlook, weighed down by a fall in prices of hogs and the overall
AgFeed retracted its 2009 outlook saying it would scale back its planned
expansion of its hog farm business during the current downturn. The company said
its business was being hurt by a decrease in the price of hogs, a surge in the
supply of swine and the overall economic downturn in China and
"The hog market in China has been softening up. The prices
have been falling over the past six months and the company did not do a very
good job in communicating that with the shareholders," Rodman & Renshaw
analyst Joe Giamichael said.
For the third quarter, the company's net
income quadrupled to $8.2 million, or $1.25 per share.
AgFeed lowered its
full-year outlook for adjusted earnings to 55 cents to 65 cents a share, from
$1.10 to $1.20 a share it forecast earlier. Due to the current volatility in
Chinese and worldwide markets, the company said it was retracting its 2009
outlook of selling 1 million hogs, which would have generated revenue of about
Click here for the free Pig Progress
To comment, login here
Or register to be able to comment.