Smithfield Foods swings to quarterly profit
- September 8, 2010
Higher prices helped pork and hog producer Smithfield Foods swing to a first-quarter profit.
The Smithfield-based company reported a net income of $76.3 million for the quarter, compared with a $107.7 million loss in the same quarter last year.
Sales for the quarter increased 7 percent to $2.9 billion, compared with $2.7 billion.
The company benefited from higher unit prices for its pork division and higher live hog market prices. Smithfield and its competitors have reduced their herds over the last few years to help bolster prices. The company reported that slaughter volumes were down 3.5 percent industry wide and frozen pork supplies were at 72 percent of last year’s levels.
The company said it expected its hog segment to remain profitable. During the quarter, the company said that fewer hogs increased hog market prices 38 percent to $58 per hundredweight.
“The business segment was very favorable in the pork segment and sharply improved in the hog production segment in the first quarter,” Smithfield President and CEO C. Larry Pope said in a statement. “The hog production cycle has turned and our fresh pork and consumer packaged meat businesses are delivering solid and consistent earnings, owing to the success of the pork group restructuring last year and strong discipline in this segment.”
Smithfield also announced that it expects a decision by the end of the month on its desire to purchase all of Butterball LLC. Smithfield currently owns 51 percent of the company, and has offered to buy Maxwell Farms Inc.’s portion for $200 million. Smithfield wants to purchase Maxwell’s share or sell its interest to Maxwell.