In comments on the company’s outlook, Smithfield said it expects margins on its packaged meat products to be at the high end of its normalized range on volume growth of 2% to 3% during the 2013 fiscal year, continuing into the next fiscal year. Smithfield is repeating the message it has sent at the ends of the past two quarters. The company’s international outlook is also unchanged: “in the upper half of the normalized range” for the full year.
The company’s CEO said:
We are excited about the growth prospects for this company as we continue to transform Smithfield into a more value-added consumer packaged meats company. We expect solid earnings in fiscal 2013 and look forward to even stronger results next year.
Operating margins in the company’s fresh pork division were 4% in the quarter, a decline from the 8% margin the company reported in the second quarter. Packaged meat margins were flat sequentially at 7%. Hog production operating margins fell to negative 8%, and Smithfield lost $15 per head on its hog production. Both figures nearly double the losses posted in the second quarter.
Shares are inactive in premarket trading this morning, having closed at $22.30 last night, in a 52-week range of $17.55 to $24.00. Thomson Reuters had a consensus analyst price target of around $25.70 before today’s results were announced.