Smithfield Foods reports lower-than-expected loss
- December 10, 2009
Smithfield Foods improved financial results in all of its operating segments during the second quarter except for hog production, where an oversupply in the U.S. has forced prices down.
The company reported a loss of $26.4 million compared with a loss of $32.5 million during the last year.
Smithfield’s pork and packaged meat segment achieved a record profit during the quarter. The pork business’ profits increased 86 percent to $173.7 million during the quarter. International operations also improved 42 percent to $15.6 million.
“This is the part of the business we have focused on and it is repeatedly delivering superior results,” C. Larry Pope, president and CEO said in a statement.
Hog production losses soared to $167.3 million during the quarter, compared to a $58 million loss last year, because of a 32 percent drop in hog prices. Prices fell from a $53 per hundredweight during the second quarter last year to $36 per hundredweight this year.
Smithfield Foods has been reducing it sow herds since 2008 and reduced its herd 13 percent.
Revenues decreased to $2.7 billion from $3.1 billion during the same period last year. The drop in sales came from lower fresh pork prices, international exchange rates and to low hog production prices.
The company says its restructuring plan is ahead of schedule and that it should be profitable during the second quarter.