Smithfield Foods CEO Larry Pope has insisted the US meat will produce “another year of solid earnings” despite lower quarterly profits.
Falling earnings from fresh pork and hog production contributed to a decline in first-quarter profits at the company, it reported today (5 September).
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Net income in the three months to 29 July was US$61.7m, down from $82.1m. Operating profit fell from $173.2m to $131.8m. Net sales were flat at $3.09bn.
Smithfield made an operating loss of £12m from fresh pork amid higher supplies and weak demand in the US. The jump in grain costs from the US drought hit earnings from hog production.
However, operating profit from packaged meats was higher and Pope said the “strong momentum” in that part of the business would help Smithfield’s results this year. He also said the performance of Smithfield’s fresh pork business would improve.
“Despite headwinds in our hog production business, improving fresh pork results combined with robust packaged meats profitability and higher packaged meats volumes, as well as strong international segment profitability should fuel solid results in fiscal 2013,” Pope said.
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