030435 Smithfield Foods Slashes Profit Outlook

New York - Smithfield Foods Inc., the largest U.S. hog and pork producer, on Friday warned that low fresh pork prices will cause its fiscal fourth-quarter earnings to fall far short of Wall Street's current estimates.

An excess of meat this past year has hurt results at companies like Smithfield and Tyson Foods Inc., the nation's largest meat company.

For the quarter ending April 27, the Smithfield, Virginia-based company said its sees earnings at 3 cents to 5 cents per diluted share, as the combination of low hog prices and weak fresh meat prices hurt profitability. Wall Street analysts' consensus estimate had been for earnings of 10 cents a share, according to research firm Thomson First Call.

"Fresh pork prices have been under severe pressure due to the excess supply of all proteins in the marketplace, resulting in reduced profitability in the company's Meat Processing Group," Smithfield said.

Smithfield's hog production group, which sells about 13 million hogs a year, has been unprofitable throughout the quarter as live hog prices have remained below break-even levels longer than expected, the company said.

Market conditions in pork processing and hog production are slowly improving because of a smaller U.S. breeding herd. Smithfield's hog production operations should return to profitability in the first quarter of fiscal 2004, it said.

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