DAKOTA CITY, Neb - IBP, inc. reported net sales for the third quarter ended September 27 of $3.4 billion compared to $3.2 billion in the same quarter in 1996. Earnings from operations were $61 million, down from the $66 million reported last year. Quarterly net earnings were $29 million, or $.31 per share, versus $40 million, or $.42 per share last year.
Net sales for the first nine months of 1997 totaled $10.0 billion, up from the $9.5 billion realized during the same period in 1996. Earnings from operations were $178 million versus $295 million last year. Nine month net earnings totaled $95 million, or $1.01 per share compared to $180 million, or $1.87 per share in 1996.
"Our export and value-added businesses experienced marked sales increases during the third quarter," Robert L. Peterson, IBP chairman said. "We also began to see long-awaited improvements in the financial performance of our pork operations, as hog supplies began to rebound.
"Unfortunately, these positive developments were dampened by other factors, including new plant start up costs and increased supplies of animal protein," he added.
Export sales for the third quarter were up 24% over the same period last year, while export sales for the first nine months of 1997 were down only 5% from the same period in 1996. Meanwhile, IBP subsidiary Foodbrands America, purchased on April 29, 1997, generated total sales of $239 million during the third quarter, an increase of 9% over the same period in 1996.
IBP's quarterly earnings once again reflect the expense of recent plant openings. The new processing facility at IBP's beef plant in Alberta, Canada, remains in the start up phase, as does the company's Columbia, South Carolina, cooked meats plant. Both began operations in early 1997.
Efforts to expand IBP's value-added meat production received a boost earlier this week with the opening of the company's new Platte County Processed Meats facility near Columbus, Nebraska. The ground beef processing facility -- which was purchased by IBP in early October -- is initially operating one production shift and employing approximately 130 people. Production volume and employment will increase as the customer base grows.
New technology designed to enhance food safety is being installed at all of IBP's beef plants. After months of testing and equipment modifications, the company is installing steam cabinets that are designed to provide added protection against bacteria at its beef plants. The cabinets apply saturated steam to the complete surface of the beef carcass during the manufacturing process. This steaming process significantly reduces the risk of bacterial contamination.
IBP is the world's largest producer of fresh beef, pork and related allied products and is also a high quality supplier of fully prepared meats for the retail and food service industries. The company employs 38,000 people.
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