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Smithfield Foods posts higher sales, profit on strong packaged meats, pork demand.

companies :: 9hrs ago :: source - reuters

By Reuters

A sculpture adorns Smithfield Foods' hog slaughterhouse in Smithfield, Virginia, U.S. October 17, 2019. Picture taken October 17, 2019. REUTERS/Tom Polansek/File photo

(Reuters) - U.S. pork processor Smithfield Foods (SFD.O) on Tuesday posted higher first-quarter sales and profit, helped by strong demand for its packaged meats and pork businesses and cost-control efforts.

The Virginia-based company has been focusing on its high-margin packaged meats business. It sells pork, ham and sausages under brands including Smithfield, Eckrich and Nathan's Famous.

Packaged meat sales rose 1.2% in the quarter ended March 30 from a year earlier. It is a major revenue generating segment for Smithfield. Fresh pork sales increased 4.9%.

Smithfield, which went public in January, warned last month that cautious consumer spending and higher raw material costs were crimping profit in its packaged meats business.

The segment's operating profit declined 7% to $266 million, while profit in its pork business slumped 25.7% to $82 million in the reported quarter.

Smithfield has kept a tight lid on its expenses through workforce reduction and exiting certain farm operations to reduce its hog production business at a time of higher input costs.

Its quarterly adjusted operating margin was 8.6%, up from 5.1% in the first quarter of 2024.

Smithfield posted a 9.5% rise in total sales to $3.77 billion in the quarter. It earned 58 cents per share in adjusted profit from continuing operations, compared with 32 cents a year earlier.

The company reaffirmed its annual sales forecast in the low-to-mid-single-digit percentage range compared to last year, and packaged meats adjusted operating profit of between $1.05 billion and $1.15 billion.

Tyson Foods, a rival U.S. meatpacker that sells pork, chicken and beef, is set to report quarterly earnings on May 5.

(Reporting by Savyata Mishra in Bengaluru and Tom Polansek in Chicago; Editing by Shinjini Ganguli)

Reuters report


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