News Column

Smithfield Gets Slaughtered in Fourth Quarter

June 14, 2013
Smithfield Foods

Smithfield Foods Inc. announced today that its fourth-quarter profit was $29.7 million, or 21 cents per share. That was down 63 percent from $79.5 million, or 49 cents per share, in the same period last year.

For the fiscal year, which ended April 28, the pork company's income was $183.8 million, or $1.26 a share, compared with $361.3 million, or $2.21 a share, in fiscal 2012.

Sales for the fourth quarter totaled $3.3 billion, up 3 percent from a year ago.

Packaged meats continue to be among Smithfield's strongest businesses, enjoying a 17 percent profit increase from the previous year, C. Larry Pope, the company's president and CEO, said in a news release.

But Smithfield's hog production sector suffered from higher feed prices and its export business took a hit from certification requirements in China and Russia and declines in shipments to Japan.

Steve Marascia, an analyst with Capitol Securities outside Richmond, noted that Smithfield's results fell far short of analysts' predictions, which averaged 42 cents per share for the quarter.

"I was surprised at the severity of the shortfall from hitting the Street consensus," he said, referring to Wall Street. But Marascia added: "Smithfield has always been a byproduct of different moving parts. Periodically, you see these types of quarters coming. This is nothing out of the norm of past performance."

Smithfield announced last month that it had agreed to a $7.1 billion takeover bid from Shuanghui International Holdings Ltd. of China.

The takeover bid would provide stockholders $34 for each share of Smithfield stock. Smithfield's shares closed at $32.81 each Thursday on the New York Stock Exchange.

If the offer is approved by Smithfield's shareholders and federal regulators, Smithfield would no longer be a publicly traded company and would be delisted from the stock exchange.

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(c)2013 The Virginian-Pilot (Norfolk, Va.)

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