Smithfield returns to profitability in quarter

by Staff
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SMITHFIELD, VA. — Smithfield Foods, Inc. returned to profitability during the third quarter on strength in its packaged meats business and sales overseas.

For the quarter ended Jan. 31, the company had income of $37.3 million, equal to 22c per share on the common stock, which compared with a loss of $105.7 million during the same quarter of the previous year. Sales for the quarter were $2,884.7 million, down 14% from $3,348.2 million during the same quarter of the previous year.

“The third quarter demonstrated the ongoing strength of our packaged meats business, which continues to deliver very strong margins,” said C. Larry Pope, president and chief executive officer. “We are extremely focused on this part of the business, it is paying dividends and the restructuring program is beginning to have an impact. The action items called for in the Pork Group restructuring plan are complete, and the benefits are meeting expectations. As of this month, we have closed all six plants that were announced as part of the restructuring plan early last year. We are on track to achieve the targeted $55 million of profit improvement this year, after applicable restructuring expenses and $125 million of annual benefits beginning in fiscal 2011.”

Operating profit in the pork segment was $152.8 million, up 18% from $129.4 million during the same quarter of the previous year. Sales were $2,399.4 million, down 15% from $2,826.6 million during the same quarter of the previous year.

The international segment posted operating profit of $13.1 million, down 10% from $14.5 million during the same quarter of the previous year. The segment had sales of $343.1 million, down 3% from $333.2 million during the same period of the previous year.

The hog production segment sustained an operating loss of $55.6 million during the quarter, which compared with a loss of $253.6 million during the same period of the previous year. The segment had sales of $691.8 million, up 5% from $660.5 million during the same quarter of the previous year.

For the nine months ended Jan. 31, the company suffered a loss of $96.8 million, which compared with a loss of $117.2 million during the same period of the previous year. During the nine months the company had sales of $8,292.4 million, down 14% from $9,637.1 million during the same period of the previous year.

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