Smithfield Foods Inc. Earnings: Surges Past Profit Estimate

Smithfield Foods Inc. (NYSE:SFD) reported its results for the second quarter. Smithfield Foods is a hog producer and pork processor that produces and markets a number of fresh meat and packaged meats products both domestically and internationally.

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Smithfield Foods Inc. Earnings Cheat Sheet

Results: Net income for Smithfield Foods Inc. fell to $10.9 million (7 cents per share) vs. $120.7 million (74 cents per share) a year earlier. This is a decline of 91% from the year-earlier quarter.

Revenue: Fell 2.6% to $3.23 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Smithfield Foods Inc. reported adjusted net income of 61 cents per share. By that measure, the company beat the mean estimate of 44 cents per share. Analysts were expecting revenue of $3.26 billion.

Quoting Management: “Our solid second quarter performance reflects the results of our ongoing efforts to deliver higher quality and more consistent earnings to our shareholders led by growth in our packaged meats business, even when faced with challenging commodity markets,” said C. Larry Pope, president and chief executive officer.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell one percentage point to 11.7% from the year-earlier quarter. In that span, margins have contracted an average of 2.5 percentage points per quarter on a year-over-year basis.

The company trumped estimates last quarter after falling shy in the two quarters prior. In the first quarter, it missed the mark by 5 cents, and in the fourth quarter of the last fiscal year, it came in under estimates by 10 cents.

Revenue has fallen in the past two quarters. In the first quarter, revenue declined 0.1% to $3.09 billion from the year-earlier quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the third quarter is 52 cents per share, up from 48 cents ninety days ago. For the fiscal year, the average estimate has moved up from $1.81 a share to $1.85 over the last thirty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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