Smithfield profit tumbles 50%

24-08-2006 | |

Smithfield Foods profits dropped 50% in the fiscal first quarter of 2006, the company announced yesterday.

These figures were the result of costs related to the sale of a business and lower earnings from its industry-leading pork production operations. Profit for the quarter ended July 30 fell to $24.6 million, or $0.22 per share, from $49 million, or $0.44 per share, during the same period last year.
“I will tell you I am not happy about this quarter,” C. Larry Pope, president and chief operating officer, said.
Operating results in the pig production segment declined due to higher raising costs, lower volumes and an impairment charge of $4.2 million relating to the pending sale of the company’s Brazilian live pig production operations. Operating earnings for the business fell to $90 million from $115 million.
Pope said a strong pig market and increasing seasonal demand as the weather cools should be good for fiscal-year results.
He also noted that Smithfield expects to complete its acquisition of most assets of the branded meats business of ConAgra Foods in the second quarter.
The company will also continue its focus on for instance Poland. Smithfield has been recently said to focus on Romania, because of problems in Poland. However, it turns out that the giant, the owner of Polish Grupa Animex , will grow in Poland as well.
Capacity is growing because Animex is quickly increasing pork exports to UK and Asia.

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