Smithfield profit down on rising feed cost, weak exports
Updated: 2013-09-07 10:45
Smithfield ham slices are on sale at the Taste of Smithfield restaurant and gourmet market in Smithfield, Virginia in this file photo taken May 30, 2013.[Photo/Agencies]
WASHINGTON - US pork producer Smithfield Foods said Friday that its earnings fell sharply in the latest quarter due to rising feed cost and declining pork exports.
For the quarter ending July 28, Smithfield reported a profit of 39.5 million dollars, or 27 cents a share, compared with 61.7 million dollars, or 40 cents a share, a year ago.
"The operating environment in fresh pork and our international business was difficult in the first quarter," said CEO Larry Pope.
He noted that normal seasonal weakness in fresh pork was exacerbated by declines in key export markets, namely Japan, as well as China and Russia. In addition, higher raising costs in hog production business in Eastern Europe and Mexico adversely impacted earnings.
However, sales rose 10 percent to 3.4 billion dollars in the quarter. And total pork sales, which are the biggest share of Smithfield's revenue, climbed by 9.6 percent to 2.85 billion dollars.
Smithfield is the world's largest pork processor and hog producer. In May, China's Shuanghui International Holdings Ltd. announced a plan to acquire Smithfield, believing Smithfield's fame in pork quality can help beef up its competitive edge in the Chinese market.