Smithfield Foods Turns To Profit In Q3

Smithfield Foods has reported net income of $37.3m or $0.22 per diluted share for the third quarter ended January 31, 2010 compared to net loss of $105.7m or $0.74 loss per diluted share for the prior year quarter. Sales for the quarter were $2.88bn compared to $3.35bn for the same quarter previous year.

Fresh pork operating profit for the quarter was $7.5m compared to $13.5m for the same period last year. Operating profit for the packaged meats segment was $145.3m compared to $115.9m for the same quarter last year. Hog segment posted operating loss of $55.6m compared to $253.6m in the corresponding quarter prior year.

Under the international segment, the company said its operations in Poland delivered strong results and brand growth as sales volumes increased 24% and operating profit improved by $6.9m. For the quarter, others posted operating income of $6.6m compared to operating loss of $9.5m in the same quarter prior year.

For the nine month period, sales were $8.29bn compared to $9.64bn in the same period last year. Net loss for the nine month period was $96.8m or $0.63 per diluted share compared to $117.2m or $0.84 per diluted share in the prior year period.

Larry Pope, president and chief executive officer of Smithfield Foods, said: 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 $55m of profit improvement this year, after applicable restructuring expenses, and $125m of annual benefits beginning in fiscal 2011.

Much of the success of the Pork Group restructuring plan is attributable to the benefits received from shuttering underutilized plants. These plant closures, combined with the rationalization of unprofitable business, have allowed this organization to realize strong bottom line growth.”

He added, We anticipate that fresh pork margins will improve as hog slaughter levels continue to decline and the Sioux City plant is closed in April. In addition, we expect that fiscal 2010 should be the second best year ever for Smithfield fresh pork exports.

“Our trade representatives are actively working to fully reopen the Chinese and Russian markets and secure the approval of our plants for shipping. I fully expect these markets to be reopened by the end of this fiscal year.”