Smithfield Foods today reported a sharp fall in its fourth quarter net income. The company said it was hit by depressed pork margins and lower live hog prices as a result of an oversupply of proteins in the US marketplace. In addition, higher energy costs materially impacted margins in both the pork and beef segments.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more


The company said net income for the fourth quarter of fiscal 2006 was US$1.1m, or $0.01 per diluted share, versus net income last year of $85.4m, or $0.76 per diluted share. Sales were $2.7bn, compared to $2.9bn last year.


Income from continuing operations, excluding Gorges/Quik-to-Fix Foods, was $4.7m, or $0.04 per diluted share, versus $85.1m, or $0.76 per diluted share in the previous year.


For fiscal 2006 the company reported net income of $172.7m, or $1.54 per diluted share, versus net income last year of $296.2m, or $2.64 per diluted share. Income from continuing operations was $180.3m, or $1.61 per diluted share, versus $298.9m, or $2.66 per diluted share in the prior year. Fiscal 2006 sales were $11.4bn, compared to $11.2bn last year.


“This past quarter was difficult for many in the protein industry, including ourselves,” said Joseph W. Luter, III, chairman and chief executive officer. Luter further noted that while overall results were disappointing, the company’s integrated model continued to help lessen the adverse impact of these weak industry conditions.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“We are in the middle of several major expansion initiatives, both in the United States and Europe. While these initiatives might adversely impact earnings in the short term, I believe strongly that the moves we are making in Romania and Poland and our entering into an exclusive negotiation period regarding the purchase of the European meats business of Sara Lee Corporation are right for this company for the long term,” said Luter.


“Looking into next year, it will take some time to work through the excess protein in the marketplace. Pork margins continue to be under pressure,” Luter said. “On the bright side, live hog futures are holding up well into the summer which bodes well for continued profitability in hog production. With an increased number of cattle available and seasonally strong demand, we should have a better beef processing quarter.”