Smithfield swings to loss in quarter

by Staff
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SMITHFIELD, VA. — Losses in hog production weighed heavily on financial results and led to a significant loss for Smithfield Foods, Inc. during the second quarter.

For the quarter ended Nov. 1, the company sustained a loss of $26.4 million, which compared with income of $1.7 million during the same quarter of the previous year. Sales for the quarter were $2,692.4 million, down 15% from $3,174.1 million during the same quarter of the previous year.

“Our packaged meats business continued to deliver record profits in the second quarter,” said C. Larry Pope, president and chief executive officer. “This is part of the business we have focused on, and it is repeatedly delivering superior results. The restructuring plan is in full swing and achieving benefits that are ahead of schedule with estimated profit improvement of approximately $1.7 million in the second quarter of fiscal 2010. We expect this plan will deliver the targeted $55 million of profit improvement this year after applicable restructuring expenses, and the full $125 million of annual benefits going forward. Unfortunately, these results were offset by continued losses in hog production. Although raising costs declined again this quarter, domestic hog prices were sharply lower as oversupply conditions in the U.S. persisted.”

The pork segment had operating profit of $173.7 million, up 46% from $93.4 million during the same quarter of the previous year. Sales in the segment were $2,241.7 million, down 13% from $2,590.1 million.

The hog production segment suffered an operating loss of $167.3 million, which compared with a loss of $58 million during the same quarter of the previous year. The segment had sales of $554.9 million, down 26% from $748.8 million during the same quarter of the previous year.

For the six months ended Nov. 1, the company had a loss of $134.1 million, which compared with a loss of $11.5 million during the same period of the previous year. Sales for the six months were $5,407.7 million, down 14% from $6,288.9 million during the same period of the previous year.

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