US meat giant Smithfield Foods has today (8 September) reported what it said were “record” first-quarter results, with improved sales and earnings.
The company’s net sales climbed 7% to US$3.09bn in the three months to the end of July thanks to higher prices for hogs, pork and packaged meats.
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Smithfield posted a 7.6% gain in net income to $82.1m, thanks to lower interest costs. The processor’s operating profit fell 8.1% to $173.2m. However, the company pointed to litigation costs of $39m, impairment charges of $4.3m and $5.7m in costs from its aborted attempt to buy a controlling stake in Spanish firm Campofrio Food Group. Adjusted operating profit increased to a “record” $222.2m, Smithfield said.
President and CEO Larry Pope said the company had delivered a “record performance” for the “past five quarters”. He said Smithfield’s had successfully executed its strategy of positioning the company as a “leading packaged meats company”.
Pope explained that Smithfield had increased the “customer-focused marketing” of its brands, improved its cost structure and strengthened its balance sheet, although he acknowledged that the company had also benefited from “favourable industry conditions”.
A balance between the supply and demand had helped margins on fresh pork and “robust” demand worldwide had driven a “double-digit” increase in export volumes and revenues, he said.
Pope added that “low global protein inventories” and led to “historically high” live hog prices.
Shares in Smithfield were up in pre-market trading but were down 4.11% at $21.21 at 09:58 ET.
