March 5, 2007

Smithfield Foods reports third quarter results
 

Virginia-based Smithfield Foods Incorporated declared income from continuing operations for the third quarter of fiscal 2007 was US$60.4 million, or US$0.54 per diluted share, versus income from continuing operations last year of US$75.0 million or US$0.67 per diluted share. Sales were US$3.3 billion versus US$2.9 billion a year ago.

Income from continuing operations for the nine-month period was US$144.0 million, or US$1.29 per diluted share, compared to US$175.6 million, or US$1.57 per diluted share, last year. Sales for the nine months totaled $8.9 billion versus $8.7 billion in the same nine-month period of the prior year.

The pork segment reflected significantly improved margins in packaged meats which were partially offset by lower margins in fresh pork. The packaged meats improvement reflects 34 percent higher volume and higher overall margins as well as significant contributions from Cook's Hams and Armour Eckrich, two businesses acquired during the past year.

These improvements are the result of a continuing effort to enhance the overall margin structure of the packaged meats business. This involves a focus on lowering costs and changing the mix to higher value-added products. Fresh pork margins continued to be disappointing.

The beef segment reflected improved processing margins which were offset by losses in the company's cattle feeding operations. Beef margins continue to be below historical levels due to limited export shipments, an overall shortage of cattle necessary for full processing levels and price pressure on all proteins.