Smithfield Foods Posts 19% Drop in Profit
Smithfield Food Inc.'s fiscal-fourth-quarter earnings fell 19% as greater pork supplies and weaker-than-expected U.S. consumer demand shrank fresh-pork margins.</br></br>Smithfield, the world's largest pork producer by volume, said the U.S. pork market remained sluggish at the start of the current quarter but that demand from export markets such as China continued to be robust.</br></br>Smithfield shares were down about 7% Thursday morning at $18.11 and are off about 25% so far this year.</br></br>Retail-sales volumes for pork in the U.S. have softened because grocery chains have kept prices relatively high, even as Smithfield and other companies processed more hogs and wholesale prices fell, said Smithfield Chief Executive C. Larry Pope in a conference call.</br></br>"We expected retail prices to come down, but they did not...so that impacted our results," Mr. Pope said. Retailers decided to capture higher margins for pork to help offset declines in beef sales, he said.