Smithfield Foods Second Quarter Earnings Sneak Peek

Smithfield Foods, Inc. (NYSE:SFD) will unveil its latest earnings on Thursday, December 6, 2012. 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.

Smithfield Foods, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 44 cents per share, a decline of 42.1% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 59 cents. Between one and three months ago, the average estimate moved down. It has risen from 43 cents during the last month. Analysts are projecting profit to rise by 29% versus last year to $1.84.

Past Earnings Performance: The company is hoping to beat estimates after missing the mark for two straight quarters. Last quarter, it reported profit of 40 cents per share against an estimate of net income of 45 cents per share. The quarter before that, it missed forecasts by 10 cents.

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A Look Back: In the first quarter, profit fell 24.8% to $61.7 million (40 cents a share) from $82.1 million (49 cents a share) the year earlier, missing analyst expectations. Revenue remained steady at $3.09 billion.

Stock Price Performance: Between September 6, 2012 and November 30, 2012, the stock price rose $2.03 (10%), from $20.34 to $22.37. The stock price saw one of its best stretches over the last year between September 25, 2012 and October 4, 2012, when shares rose for eight straight days, increasing 6.9% (+$1.34) over that span. It saw one of its worst periods between April 2, 2012 and April 11, 2012 when shares fell for seven straight days, dropping 7.8% (-$1.74) over that span.

Analyst Ratings:

Key Stats:

The company’s gross margin shrank by 2.4 percentage points in the in the first quarter. Revenue fell 0.1% while cost of sales rose 2.7% to $2.76 billion from a year earlier.

Wall St. Revenue Expectations: On average, analysts predict $3.31 billion in revenue this quarter, no change from the year-ago quarter. Analysts are forecasting total revenue of $13.21 billion for the year, a rise of 0.9% from last year’s revenue of $13.09 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.0 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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

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