US pork producer Smithfield Foods has seen first-half operating profit plunge, despite a gain in sales, as high input costs hit its turkey and hog production units.
For the six months to 26 October, Smithfield said operating profit fell to US$3.5m, down from $213.4m posted in the comparable period of 2007.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Losses from continuing operations reached $58.5m, against income of $80m a year ago. The company made a net loss of $8.4m during the first half, against net income of $72m a year earlier.
However, sales for the half rose to $6.29bn, up from $5.36bn in the first half of fiscal 2007, as a rise in pork exports drove earnings at the company’s fresh pork unit.
“Our pork business continued to perform exceptionally well, even though raw material costs were 15% higher than a year ago,” president and CEO Larry Pope said.
However, he added: “These results were offset by unprecedented adverse conditions in the hog production industry. Raising costs were at record high levels as we were consuming high-priced grain purchased last summer. Meanwhile, hog prices were well below our raising costs.”
The company said losses from continuing operations totalled $30m during the second quarter, against income of $23.4m a year earlier.
Second-quarter operating profit fell from $85.4m last year to $1m in Smithfield’s current second quarter, during which the company completed the sale of its beef processing and cattle feeding business for $580m.
Second-quarter sales rose from $2.75bn to $3.15bn.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
