Smithfield Foods increases first-quarter loss
- September 8, 2009
Low domestic hog prices and one-time charges swelled Smithfield Foods’ loss in the first quarter.
The company reported a net loss of $107.7 million for the quarter, compared with a loss of $13.2 million during the same three months last year.
The outbreak of the H1N1 virus pushed domestic hog prices lower and depressed exports, the company said. The H1N1 virus cannot be transmitted by eating pork, although its common name, the swine flu, caused many people to avoid pork.
The quarter included $34.1 million in pre-tax impairment charges on hog production assets. It also included $7.4 million of debt extinguishment.
“This first-quarter loss reflects the continuing adverse business environment in the hog production segment of the company’s operations,” CEO C. Larry Pope said in a statement. “While raising costs have continued to decline and the pork processing segment continues to deliver strong profits, they were not sufficient to offset the negative impact of low hog prices on the hog production business. The sharply lower hog prices reflect the impact of the A(H1N1) outbreak at the end of the prior quarter and softer export demand.”
Revenues were down 14 percent for the quarter to $2.72 billion, compared with $3.14 billion last year.