Smithfield Foods (SFD) posted a disappointing 36% decline in first-quarter profit on Friday as exports continued to fall and fresh pork demand waned.
"The operating environment in fresh pork and our international business was difficult in the first quarter,” Smithfield CEO Larry Pope said in a statement. “Normal seasonal weakness in fresh pork was exacerbated by declines in key export markets.”
Japan, China and Russia were among some of the weakest.
Smithfield also said sharply higher costs in its hog production business in Eastern Europe and Mexico weighed on earnings in its international segment.
The packaged meat maker, which agreed to a $4.7 billion buyout last quarter by China’s Shuanghui International Holdings, reported net income of $39.5 million, or 27 cents a share, compared with a year-earlier profit of $61.7 million, or 40 cents.
Analysts were calling for earnings of 47 cents a share, according to a Thomson Reuters poll.
Revenue for the three-month period was up 10% to $3.4 billion from $3.1 billion a year ago, beating the Street’s view of $3.2 billion. Sales were fueled by a nearly tripling in hog prices.
Smithfield called the first quarter its “low point of the year” and said it remains optimistic.
Its takeover by Shuanghui remains on track to close later this year, though it remains subject to approval by Smithfield’s shareholders and regulators.
Shares of Smithfield were trading slightly in the red Friday morning, though they have risen close to 57% year-to-date.