Meat processor Smithfield Foods has posted first-quarter net income of US$62.0m, or $0.47 per diluted share, up from $39.9m, or $0.36 per diluted share, in the corresponding period last year on sales up from $2.8bn to $3.4bn.


The company recognised after-tax write downs of $6.7m this year and $10.4m last year on the anticipated disposal of assets. Excluding the writedown, Smithfield’s EPS would have been $0.47, ahead of analysts’ forecasts for around $0.44. Beating market estimates sent Smithfield’s shares up $2.49, or 8.3%, to $32.58 yesterday (23 Aug).


In its pork operations, packaged meats volume rose by 28%, primarily on the back of the contribution from Armour-Eckrich which Smithfield acquired in October 2006. Excluding the impact of Armour-Eckrich, total packaged meats grew by 2%, the company said.


However, margins in fresh pork remained under “significant pressure”, the company added. Results for the quarter include the pork processing operations of Premium Standard Farms, acquired in May. Seasonally, fresh pork margins are weak in the first quarter, and Smithfield said this was the case this year.


Beef processing margins rose, reflecting a more favourable operating environment, increased volume and higher exports.


Smithfield said its international operations recorded strong profitability in the first quarter of the current fiscal year, against a slight loss last year. Groupe Smithfield, the combination of the company’s previously-owned Jean Caby operations and the recently-acquired Sara Lee European meats business, continued its strong performance, Smithfield added, while its Polish operations were “solidly profitable”.