3rd quarter earnings for Smithfield Foods
Smithfield Foods, Inc. reported operating income for
the third quarter of the fiscal year 2008 of US$59.1 million compared to US$62.1
million last year.
For the third quarter, net income of US$54.6 million was generated including
an after-tax loss of US$4.5 million from discontinued operations. 2007's third
quarter net income of US$60.4 million included an after-tax loss of US$1.7
million from discontinued operations.
Results for the third quarter were negatively impacted by a significant
increase in the company's estimated effective tax rate.
Sales, however, rose amounting to US$3.8 billion, compared to US$3.3 billion
a year ago.
Pork profit up
Profits generated from the
pork segment rose to US$141.1 million from US$310.9 million in January 2007 on
account of the acquisition of Premium Standard Farms in May. Exports of pork
have grown significantly. Packaged pork margins have also improved with the
volume of fresh pork also rising 35%.
Pre-cooked product categories continued to grow, with several
convenience-oriented lines showing double-digit growth, including pre-cooked
bacon, sausage, ribs and entrees.
As a result of considerably lower hog
prices and higher feed costs, hog production operations did not fair well.
Operating profit was lower in the
international segment than in the same period last year - dropping from US$46.4
million down to US$ 31.0 million.
Groupe Smithfield experienced a slight decline in sales volume as well as
competitive price pressures which decreased margins in the private label, cooked
ham and cooked sausage categories in the French and Dutch markets.
Animex operations in Poland continued its trend of improved earnings in spite
of hog prices well above last year.
"We enjoyed very strong fresh pork
margins that were much higher than historical levels as a result of lower hog
costs and strong industry exports", said C Larry Pope, president and chief
executive officer. "I am very pleased with our packaged meats margins, which
benefited from low raw material costs and a continuing focus on this
"Looking forward to the fourth quarter will likely be very difficult, as our
hog production operations probably will not achieve profitability. The key to
overall results will be the extent to which our pork segment results offset
anticipated weak performance from our hog production segment," Mr. Pope said.
â€¢ Smithfield Foods
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