Smithfield Foods Earnings: Increased Costs STRAIN Margins as Profit Drops

Smithfield Foods Inc. (NYSE:SFD) reported its results for the first quarter. Smithfield Foods is a hog producer and pork processor that produces and markets a number of fresh meat and packaged meats products both domestically and internationally.

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Smithfield Foods Inc. Earnings Cheat Sheet

Results: Net income for Smithfield Foods Inc. fell to $61.7 million (40 cents per share) vs. $82.1 million (49 cents per share) a year earlier. This is a decline of 24.8% from the year-earlier quarter.

Revenue: Fell 0.1% to $3.09 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Smithfield Foods Inc. fell short of the mean analyst estimate of 53 cents per share. It fell short of the average revenue estimate of $3.26 billion.

Quoting Management: “Our first quarter results underscore the ongoing strength of our packaged meats business, which delivered record margins and solid volume gains. These results also emphasize the fact that the key driver of our business model is our packaged meats business, which generated the majority of our earnings again this quarter,” said C. Larry Pope, president and chief executive officer.

Key Stats:

The company has now seen net income fall for four quarters in a row. In the fourth quarter of the last fiscal year, net income fell 19.2% while the figure fell 61% in the third quarter of the last fiscal year and 16% in the second quarter of the last fiscal year.

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 10.5%.

The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 2 cents, and in the third quarter of the last fiscal year, it was ahead by 7 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 67 cents a share to 65 cents over the last thirty days. At $2.67 per share, the average estimate for the fiscal year has fallen from $2.73 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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