Smithfield Foods Inc. said profits in its fiscal first quarter more than doubled, due in part to an increase in the company’s pork segment. Net earnings for the quarter ended July 29 were $54.5 million, up from $24.6 million in the year-earlier period. Sales increased 23 percent, reaching $3.36 billion.
"Given the challenges of higher grain costs and the continued adverse fresh pork environment, I am generally satisfied with our performance in the first quarter," Smithfield CEO C. Larry Pope said in a release.
In the pork segment, total sales came in at $2.23 billion for the quarter, up from $1.74 billion in the prior-year quarter, with 28% growth in packaged meats volume. The company attributed the volume growth to contributions of Armour-Eckrich acquired in October 2006. Excluding the impact of Armour-Eckrich, total packaged meats volume edged up 2%. Margins in fresh pork remained under pressure during the quarter, as fresh pork margins are seasonally weak in the first quarter. The fresh pork results included the pork processing operations of Premium Standard Farms, acquired in May.
First-quarter sales in the company's hog production segment were $605.6 million, higher than the $458.4 million in same quarter of fiscal 2006. The segment's operating profits improved despite higher costs and the adverse impact of circovirus. Costs averaged $49 per hundredweight in the U.S., compared to $42 per hundredweight last year. The company also said that live hog market prices averaged $53.50 per hundredweight for the quarter, up from $51 per hundredweight in the same quarter of last year. The segment also benefited from a $17 million quarter-to-quarter swing in foreign currency translation gains.
Source: Smithfield Foods News Release