September 8/Smithfield, Va./Globe Newswire -- Smithfield Foods Inc. reported fiscal 2011 first quarter results. Net income was $76.3 million, or $.46 per diluted share, an improvement of $184.0 million, or $1.21 per diluted share, from the first quarter of fiscal 2010. Consolidated operating profit improved $252.4 million versus a year ago. Pork segment operating profit increased $12.3 million, or 12%.
Fresh pork operating profit improved $51.0 million, while packaged meats results remained strong at $67.3 million, or $.11 per pound. The pork segment produced record first quarter earnings for the fourth time in a row, and hog production returned to profitability, improving by $244.0 million. Other segment results rose $5.8 million.
Sales for the first quarter of fiscal 2011 were $2.9 billion, up 7% compared to the first quarter of fiscal 2010. The year over year increase is primarily attributable to higher average unit selling prices in the Pork segment and higher live hog market prices. The company reported net income in the current quarter of $76.3 million ($.46 per diluted share) compared to a net loss of $107.7 million ($0.75) per diluted share) last year, an improvement of $184.0 million.
Commencing in the first quarter of fiscal 2011, results from the company's international hog production operations in Poland, Romania and Mexico are reported in the International segment. Previously, results from these operations were reported in the Hog Production segment. The Hog Production segment is now comprised solely of U.S. live hog production. The company anticipates these segment changes will provide greater transparency into the results of its Hog Production segment and align the company's external reporting with how management currently views these businesses. The prior year results have been reclassified to reflect the realignment. The segment change has no effect on total company operating profits or net income in either fiscal year.
"Fiscal 2011 is off to a great start with record first quarter earnings. The business environment was very favorable in the Pork segment and sharply improved in the Hog Production segment in the first quarter," said C. Larry Pope, president and chief executive officer.
Pope continued, "The hog production cycle has turned and our fresh pork and consumer packaged meats businesses are delivering solid and consistent earnings, owing to the success of the Pork Group restructuring last year and strong discipline in this segment. Although the first quarter is generally the most difficult quarter for fresh pork, the company generated very strong fresh pork earnings, bolstered by solid exports and low protein supplies, which created an environment of strong profitability. Overall favorable market dynamics benefited the company in all segments."
"Despite rapidly rising and historically high priced raw materials, we delivered solid results in our packaged meats business led by double digit gains in Curly's BBQ, Off the Bone Lunchmeats, Armour LunchMakers and Kretschmar Deli. These brands and product categories are strategically important as we continue to focus on delivering strong margins in this business," he stated.
From the September 9, 2010, Prepared Foods' Daily News
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