US meat processor Smithfield Foods has reported a massive rise in second-quarter profit, helped by strong performances in its beef and pork operations.
The company posted earnings of US$36.2m, 33 cents a share, for the second quarter to 26 October, versus net income of $4.1m, or 4 cents a share, a year earlier.
Second-quarter sales rose to $2.1bn from $1.8bn in the year-ago period.
Net income from continuing operations, excluding Schneider Corporation results, was $31.9m, or 29 cents a share, compared with breakeven results last year. In September Smithfield announced a definitive agreement to sell Schneider, its wholly-owned Canadian subsidiary, to Maple Leaf Foods. The sale, which is subject to regulatory approval, is expected to close before the end of the company’s fiscal year.
Smithfield said second-quarter sales from continuing operations “increased on higher pricing, both in beef and pork, reflecting the impact of higher raw material costs in pork and continued strong demand for beef.”
Joseph W. Luter, III, chairman and chief executive officer, said that he was generally pleased with the results. “Our pork and beef operations are healthy and our processed meats business is growing faster than the industry,” he said.
Luter added that he was optimistic about the remainder of fiscal 2004. “Early indications are that we will have a good third quarter. Our beef operations continue to be strong and our processed meats business continues to show significant growth in several product categories. The futures market reflects improving prices for live hogs late in the third quarter and into our fiscal fourth quarter. Finally, the addition of Farmland looks to be a significant contributor to earnings immediately,” Luter said.