December 2, 2005

Smithfield Foods Q2 income down 12 percent

US meat processor Smithfield Foods posted a net income of US$51.6 million for its second quarter ended Oct 30, down 12 percent from US$58.4 million in the same period last year, it announced Nov 30.

The current quarter results included pre-tax charges of US$16.3 million, due to several pork processing operations restructuring, while last year's Q2 results included pre-tax charges of US$8.3 million, due to operating losses and shutdown costs of a plant and the settlement of a civil suit.

However, Q2 sales were up 7 percent to US$2.9 million from US$2.72 million last year.

Excluding the plant restructuring charges, pork segment earnings were US$44 million, up 10 percent from a year ago, while processed meats volume grew 2 percent. Important pre-cooked product categories, such as bacon, sausage and ribs, grew at double-digit rates, while fresh pork volume declined 3 percent.

Reflecting continuing depressed industry conditions and closed export markets, the company's beef operations also experienced a modest loss.

In Smithfield Foods' international meat operations, higher raw material costs pressured margins in Poland and France.