Higher prices push Smithfield Foods 1Q profit upSMITHFIELD, Va. — Smithfield Foods Inc.'s fiscal first-quarter net income rose 8 percent, as the world's biggest hog producer charged higher prices and sold more packaged meats.
SMITHFIELD, Va. — Smithfield Foods Inc.'s fiscal first-quarter net income rose 8 percent, as the world's biggest hog producer charged higher prices and sold more packaged meats.
The Smithfield, Va., company, whose brands include Armour, Farmland and its namesake, also cautioned Thursday that high feed costs will remain a problem but that fiscal 2012 should be "another very good year."
Its stock gained 64 cents, or 2.9 percent, to $22.76 in premarket trading.
Smithfield earned $82.1 million, or 49 cents per share, for the three months ended July 31. That's up from $76.3 million, or 46 cents per share, a year earlier.
Removing a charge tied to a lawsuit and other items, earnings were 69 cents per share.
This topped the 68 cents per share that analysts polled by FactSet expected.
Revenue increased 7 percent to $3.09 billion from $2.9 billion, but missed Wall Street's $3.14 billion.
Sales of both fresh pork and packaged meats climbed, with international sales also rising. Smithfield said the average unit selling prices for its packaged meats rose 8 percent.
Demand for pork appears to be picking up, giving Smithfield the opportunity to pass on the higher costs it had been paying for corn and soybeans to feed its hogs by raising its prices.
President and CEO C. Larry Pope said in a statement that the company posted higher sales volume in its 12 core brands in the quarter, which include Cook's, Kretschmar and Curly's. Smithfield's Armour LunchMakers, Curly's Tub BBQ, Eckrich hotdogs and smoked sausage, Kretschmar deli, and Smithfield marinated product lines also did well.
Looking at next year, Pope said the company anticipates that its packaged meat sales volume will increase 3 percent.
"Fiscal 2012 is off to a great start with strong earnings growth, and we expect this year to be another very good year for the company," he said.