SHAWNEE MISSION, KAS. — Much like the rest of the food industry, Seaboard Corp. experienced a difficult second quarter of fiscal 2008 due to volatile markets for grains and feed ingredients. For the second quarter ended June 28, the company’s net income was $20,963,000, equal to $16.85 per share on the common stock, compared with $42,657,000, or $33.82 per share, for the same period of the previous year. Sales for the quarter were $731,123,000 during the quarter, which compared with $507,645,000 for the second quarter of fiscal 2007.
Sales spiked for Seaboard’s Commodity Trading and Milling business as the unit recorded sales of $407.6 million, an increase of $184.2 million compared with the same period during 2007. Operating income was $13.1 million for the quarter, which compared with a loss of $4.2 million during 2007.
Seaboard management said the operating income increase was due to certain long inventory positions, principally in wheat, previously taken by the company that provided higher-than-average commodity trading margins. The company does not anticipate such favorable margins continuing throughout the rest of 2008.
Seaboard’s Pork business saw its operating income decline $39.4 million during the quarter, going from $13 million in 2007 to a loss of $26.4 million during the second quarter of fiscal 2008. Sales for the quarter were $288.3 million compared with $261.7 million during the second quarter of fiscal 2007.
The decrease related to higher feed costs from the increased price of corn and soybean meal, according to the company. Also impacting the pork segment’s operating income was a new method used by the company to determine certain inventory costs.
For the first six months of fiscal 2008, Seaboard’s net income declined slightly from $92,012,000, or $72.95 per share, during the first half of fiscal 2007, to $90,990,000, or $73.14 per share, during 2008. Sales for the first six months of 2008 were $1,477,023,000 compared with $1,020,596,000 during the same period in fiscal 2007.