Smithfield Foods, Inc., a wholly owned independent subsidiary of WH Group Limited, reported record 2014 first quarter results.
All comparisons are to the first quarter of 2013. Sales for the first quarter of 2014 were $3.4 billion, up 3%. Net income was $105.3 million, compared to net income of $18.2 million last year.
Highlights
Net income +479% to first quarter record high of $105.3 millionSales +3% to $3.4 billionConsolidated operating profit +234% to $196.4 millionOperating profit and margins higher in every business segmentTotal Pork operating profit +40% to $180.2 millionFresh Pork operating profit +171% to $59.0 millionPackaged Meats operating profit +13% to $121.2 millionHog Production operating profit increased to $9.5 millionInternational operating profit +158% to $36.9 millionExport sales volume +17%Reduced interest expense 5%
"We are pleased to report a record first quarter with strong margin gains across all segments of our business. Our results reflect outstanding execution at the operating level, better markets and an improved export environment owing, in good measure, to our strategic combination with WH Group. On that front, we are opportunistically pursuing exciting growth opportunities in the enormous and rapidly growing Chinese pork market that we expect will yield dividends for years to come," said C. Larry Pope, president and chief executive officer.
He continued, "I am particularly pleased with our progress in the packaged meats segment. Notwithstanding an overall volume decline related to the late timing of the Easter holiday, we nonetheless achieved broad-based gains in market share and distribution in key product categories and, importantly, we were able to maintain margins in the face of historically high raw material prices. We are continuing to build our brands through investments in targeted, high-impact consumer marketing, as well as capital improvements in our manufacturing platform."
"At the same time, our fresh pork margins were above seasonal norms, as meat values outpaced the historical run up in live hog prices. Our international segment continued as a solid contributor to our results and our hog production business turned profitable," Mr. Pope added.
"Finally, operational improvement plans in place at both the farm and plant level are beginning to show in our results. Our recent merger of two of our independent operating companies, Smithfield Packing Company and Farmland Foods, into one is improving our competitiveness and we are continuing our drive to achieve least cost and best in class operations," he remarked.
"I applaud the entire Smithfield team for delivering a record first quarter with gains across our entire platform. This achievement underscores our focus and strength as a global food company as part of WH Group," Mr. Pope said.
