020241 Smithfield Profit Beats EstimatesFebruary 15, 2002Smithfield, VA - Smithfield Foods Inc., the largest U.S. pork producer, said fiscal third-quarter profit beat analysts' estimates, as results were boosted by sales of higher-margin branded products. The company posted net income of $54.5 million, or 48 cents a share, compared with $80.8 million, or 73 cents, a year ago. Year-ago results include a one-time gain of $43.6 million, or 39 cents a diluted share, from the sale of IBP Inc. common stock. Excluding the stock sale, profit rose 46%. Analysts had forecast third-quarter earnings of 38 cents to 41 cents a share in the quarter, with an average of 40 cents, according to market research firm Thomson Financial/First Call. Sales in the quarter ended Jan. 27 rose 36% to $2.1 billion, boosted by acquisitions, as well as the emphasis on branded products. "The improved profitability reflects our strategy to transform our meat- processing operations from a provider of commodity fresh pork to a marketer of higher margin, value-added products," said Joseph W. Luter, III, chairman and chief executive officer. Smithfield lost out to rival Tyson Foods Inc. in its attempt to acquire beef processor IBP a little over a year ago and has since made smaller acquisitions to expand its beef business. The company said its earnings were lowered by 6 cents a share because of increased losses at its Animex operations in Poland, a country with weak demand and overcapacity in the meat-processing business. Smithfield said it is taking steps that it expects will make its operations in Poland profitable in the next year. Overall, operating profit at its hog production group was about flat at $307 million, as hog prices fell an average of 5%. Its new beef-processing division had sales of $526.8 million and operating earnings of $10.1 million, the company said.
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