Smithfield Foods narrows 4th-qtr loss to $4.6 million as pork profits improve

Smithfield 4Q loss narrows to $4.6 million

ST. LOUIS — Smithfield Foods, the nation’s largest pork producer, said its fourth-quarter loss narrowed to $4.6 million, or 3 cents per share, with the price for feed relatively low and demand rising.

The company also says offered to buy outright its Butterball LLC joint venture for $200 million.

When adjusted for one-time events, including tax changes and a mark-to-market adjustment of derivative positions, the company said Thursday it earned 18 cents per share. Analysts polled by Thomson Reuters were expecting 16 cents a share.

Smithfield last year reported a fourth-quarter loss of $81 million, or 57 cents per share, when all producers were hit hard by high feed costs and fears over the H1N1 virus.

The company, based in Smithfield, Va., reported revenue of $2.9 billion for the quarter ended May 2, up 2 percent.

Smithfield lost $101.4 million for the fiscal year, or 65 cents a share, down from a loss of $198.4 million, or $1.41 a share, the year before. Sales for the fiscal year were $11.2 billion, down from $12.49 billion the year before.

With feed prices lower and demand strengthening, Chief Executive C. Larry Pope said the company’s pork business is set to improve next year. Hog prices began to steady during the second half of the fiscal year as the number of slaughtered hogs fell 6 percent nationwide.

As supplies tightened, Smithfield’s hog production improved in the fourth quarter, with U.S. live hog market prices rising 23 percent. The company expects the higher prices to continue next year now that slaughterhouse capacity has been cut back.

The company offered to buy out Maxwell Farms Inc.’ s 51 percent ownership share of Butterball LLC. Maxwell Farms and either accept the offer, or agree to buy Smithfield’s 49 percent ownership stake.

Pope said Smithfield has disagreements with Maxwell Farms over marketing the Butterball brand, and wants the cash out of the partnership or have more control.

Smithfield says Maxwell Farms must decide by the end of September whether it will sell its stake in Butterball or buy Smithfield’s. If Smithfield buys out its partner, it will assume $215 million in debt and will make significant capital and marketing investments in Butterball.