Agricultural News
Smithfield Foods Posts Record First-Quarter Profits
Wed, 14 May 2014 16:24:11 CDT
Smithfield Foods, Inc., today reported a first-quarter net income nearly five times higher than the same time last year. The wholly owned subsidiary of China's WH Group Limited reported a net income of $105.3 million compared with $18.2 million last year. Sales during the period were up three percent to $3.4 billion.
Larry Pope, president and CEO of Smithfield, said, "Our results reflect outstanding execution at the operating level, better markets and an improved export environment owing, in good measure, to our strategic combination with WH Group. On that front, we are opportunistically pursuing exciting growth opportunities in the enormous and rapidly growing Chinese pork market that we expect will yield dividends for years to come."
Highlights
--Net income +479% to first quarter record high of $105.3 million
--Sales +3% to $3.4 billion
--Consolidated operating profit +234% to $196.4 million
--Operating profit and margins higher in every business segment
--Total Pork operating profit +40% to $180.2 million
--Fresh Pork operating profit +171% to $59.0 million
--Packaged Meats operating profit +13% to $121.2 million
--Hog Production operating profit increased to $9.5 million
--International operating profit +158% to $36.9 million
--Export sales volume +17%
--Reduced interest expense 5%
Pope said, "I am particularly pleased with our progress in the packaged meats segment. Notwithstanding an overall volume decline related to the late timing of the Easter holiday, we nonetheless achieved broad-based gains in market share and distribution in key product categories and, importantly, we were able to maintain margins in the face of historically high raw material prices. We are continuing to build our brands through investments in targeted, high-impact consumer marketing, as well as capital improvements in our manufacturing platform.
"At the same time, our fresh pork margins were above seasonal norms, as meat values outpaced the historical run up in live hog prices. Our international segment continued as a solid contributor to our results and our hog production business turned profitable," Mr. Pope added.
"Finally, operational improvement plans in place at both the farm and plant level are beginning to show in our results. Our recent merger of two of our independent operating companies, Smithfield Packing Company and Farmland Foods, into one is improving our competitiveness and we are continuing our drive to achieve least cost and best in class operations."
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