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Earnings · Pork · Smithfield Foods · Tariffs
Smithfield Foods, the largest U.S. pork processor and a majority-owned subsidiary of Hong Kong-based WH Group, reported increased quarterly revenue of $3.75 billion, up 12.4%, and adjusted profit of 58 cents per share, driven by climbing sales prices for packaged meat and fresh pork amid strong consumer demand.
The company raised the midpoint of its annual adjusted operating profit forecast to $1.28 billion, causing its shares to rise 2.7% in early trading. Average sales prices for packaged meat increased 9.2%, and fresh pork prices jumped 12% due to lower U.S. production and steady sales volumes, according to Smithfield.
CEO Shane Smith noted higher hog prices, which Smithfield attributed to increased raw material costs in a regulatory filing. Despite overall gains, operating profit in the packaged meats segment fell 5.7%, and fresh pork division profits dropped significantly by 64%, primarily due to reduced U.S. byproduct exports to China and a 57% tariff rate on most products shipped there.
Smithfield has implemented cost-cutting measures, including closing a sausage plant and eliminating jobs, to manage rising raw material costs and cautious consumer spending. Investors anticipate a U.S.-China trade deal, which could impact the challenging tariff environment for fresh pork.
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