SHAWNEE MISSION, KAS. — A positive performance by its Commodity Trading and Milling business boosted Seaboard Corp.’s bottom line during the first quarter of fiscal 2008, ended March 29. Net income for the quarter was $70,027,000, equal to $56.28 per share on the common stock, compared with $49,355,000, or $39.13 per share, during the previous year. Sales for the quarter were $745,900,000, up from $512,951,000 during fiscal 2007.
Sales for Seaboard’s Commodity Trading and Milling business unit increased significantly during the quarter, rising to $479,891,000 in 2008 from $246,688,000 during fiscal 2007. Operating income for the unit was $49,072,000 during the quarter compared with $10,228,000 in 2007.
The improved performance of the Commodity Trading and Milling business unit was driven by long positions taken in the wheat market, according to the company. The unit recorded higher-than-average margins as the price of wheat achieved historic highs at the time of sale. Despite the performance, the company noted in its financial results that management is unable to predict future sales and operating results, but "anticipates positive operating income for the remainder of 2008 based on current market prices for commodities."
Seaboard’s Pork business recorded a loss of $4,800,000 in the quarter compared with operating income of $20,900,000 during the first quarter of 2007. Sales for the business unit declined to $238,900,000 in 2008 from $241,600,000 during the previous year.
The decrease in operating income was attributed to the higher cost of feed, specifically corn and soybean meal. Like management’s discussion of the situation in the Commodity Trading and Milling business unit, the company said it is unable to predict future market prices for pork products or the cost of feed. Without improvement in market conditions, Seaboard executives anticipate incurring additional losses in its Pork business during the remainder of 2008.
Operating income for Seaboard’s Sugar and Citrus business unit fell to $3,173,000 in 2008 from $4,615,000 in the first quarter of fiscal 2007. Sales for the quarter increased $3,705,000 during the first quarter of 2008 compared with 2007 $31,038,000.