It wasn't the swine flu that hurt
pork division. It's just that feeding those hogs sure can get costly.
Seriously, they eat like pigs.
Smithfield Foods swung to a loss in the fourth quarter, dragged down by the high cost of feed.
The company recorded a loss of $78.8 million, or 55 cents a share, compared with a profit of $2.4 million, or 2 cents, in the year-ago period. Analysts had expected a loss of 62 cents a share.
The hog unit lost about $171 million, compared with a loss of $129 million the same time last year. While feed costs should moderate, Smithfield said it would reduce its sow herd an additional 3% following a previous 10% liquidation.
Revenue declined slightly to $2.85 billion from $2.87 billion.
Analysts had been waiting to see how much the swine-flu outbreak in April would affect the pork producer, but it appears the loss was only minimal.
"We believe that the A(H1N1) virus had only a short-term effect on U.S. fresh pork demand, which hurt our business last month," CEO Larry Pope said in a statement. "As the consumer received more accurate information about the virus, we saw domestic market conditions begin to move back to more normal levels."
Still, there do continue to be some restrictions in international markets, specifically China, which is negatively impacting exports during the current first quarter.
For the year, the company lost $190.3 million, or $1.35 per share -- its first yearly loss since 1975.
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