May 31, 2007

Smithfield Foods says earnings will miss projections

Smithfield Foods announced Tuesday (May 29) that it expects fourth - quarter earnings to be 30 to 35 cents per diluted share, significantly less than 45-cent average predicted by 14 analysts surveyed by Bloomberg News.

In a statement, Smithfield Foods attributed the preliminary estimate to higher costs in hog production, nudged up by increased corn prices, and losses in the cattle-feeding business. It also cited write-offs tied to facilities and changes in its tax rate.

Smithfield is scheduled to report its fourth-quarter results for fiscal 2007 on June 7.

The company said its described pork earnings are strong and its international operation showed a profit, compared with a loss in the same period last year.

The statement came after the close of trading. Smithfield shares dropped US$2.39, or 7.5 percent, to US$30.36 in after-hours trading, as of 5:31 p.m. The stock, which trades on the New York Stock Exchange, closed earlier at US$32.75.

Though Smithfield is seen to underperform analysts' estimates this quarter, it will end its streak of eight straight declines in quarterly earnings. In the fourth quarter of 2006, Smithfield reported income of 1 cent per share.