Hit by a disease outbreak in Romania and the negative effects of foreign currency, Smithfield Foods has reported a fall in income for its second quarter.
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The US food group said income from continuing operations for the second quarter of fiscal 2008 was US$18.7m, versus $46.4m last year. Sales were $3.5bn, compared to $2.8bn a year ago.
“Second quarter results include approximately $13m of after tax charges related to the previously-announced disease outbreak in the company’s Romanian operations and an after tax loss of $25m related to the effects of foreign currency fluctuations. These charges and foreign currency losses totalled $0.28 per diluted share,” the company said.
“The decline in earnings this quarter was almost entirely in the hog production segment, as most of our other businesses performed well,” said C. Larry Pope, president and chief executive officer. “Unquestionably, the highlight of the quarter was the dramatic improvement in packaged meats margins due to an improved product mix and our continuing effort to drive out costs. Additionally, our international meat processing operations have become consistent, growing contributors to profitability,” he said.
“We currently are in the middle of our peak holiday ham season. It looks to be another good year for this sector of the business,” said Pope.
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By GlobalData“Looking forward, the futures markets indicate continued near-term losses in hog production, but an improving environment as we move into our fiscal fourth quarter and beginning of fiscal 2009,” he said. “Meanwhile, fresh pork margins remain healthy and I expect a continued strong performance from our packaged meats business.”
