By MICHAEL FELBERBAUMAP Business Writer
RICHMOND, Va. (AP) - Smithfield Foods Inc. said Thursday that its fourth-quarter profit fell 19 percent on lower margins on fresh pork and higher selling costs.
The results missed Wall Street expectations, and Smithfield shares fell almost 3 percent in premarket trading.
The Smithfield, Va.-based company, whose brands include Armour, Farmland and its namesake, said its net income fell to $79.5 million, or 49 cents per share, for the three months ended April 29, from $98.4 million, or 59 cents per share, a year ago.
Excluding certain items, the company earned 43 cents per share. Wall Street analysts surveyed by FactSet expected 53 cents per share.
Revenue increased 3 percent to $3.21 billion from $3.12 billion as it benefited from 13 percent higher pork exports and it expanded its distribution of its packaged meats. But the revenue figure fell just short of analysts' expectations of $3.25 billion. Fresh pork sales rose about 3 percent and packaged meat sales rose less than 1 percent.
However, Smithfield said its cost of sales rose about 8 percent and its gross profit fell 25 percent.
Smithfield also announced a two-year, $250 million share buyback plan.
CEO C. Larry Pope said in a statement that the company has gained market share in products such as deli meats, bacon, sausage, and hot dogs.
"Looking ahead, I am confident that we have significant opportunities for growth as we continue to invest in our brands and improve operating efficiencies," Pope said. "In particular, I believe that our packaged meats business affords us the biggest growth opportunities."
For the year, Smithfield reported net income of $361.3 million, or $2.21 per share, compared with $521 million, or $3.12 per share, a year ago. Revenue increased 7 percent to $13.1 billion.
Its shares fell 57 cents, or 2.9 percent, to $19 in premarket trading. Its shares have traded in a 52-week range of $17.79 to $25.12.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.
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