Smithfield reported net income of just $2.4 million for the quarter, or 2 cents a share, on sales of $2.87 billion, up 20 percent over the year-earlier results mostly due to acquisitions. Not including discontinued operations, earnings were just 1 cent per share. On average, analysts had expected results of 7 cents per share.

For the fiscal year, Smithfield posted net income of $128.9 million, down 22.7 percent from last year's net profit figure of $166.8 million. Sales, meanwhile, rose 21.3 percent to $11.3 billion from last year's level of $9.4 billion.

The big negative

"The big negative here is hog production," CEO C. Larry Pope said in a teleconference with analysts and the media to discuss the financial results. "We had a $129 million operating loss (in that segment) for the quarter. The live hog market has turned around pretty dramatically since February or March, and our feed performance is getting better, but our raising costs continue to go up with ever-increasing grain costs."

Although Smithfield and other companies are in the process of liquidating up to 5 percent of their sow herds to help buoy prices, Pope said he didn't believe the market would see a significant improvement in prices before 2009.

"Basic business operations, things we can control, I could not be more pleased. I think we're doing everything we could possibly do," Pope said. "The only wild card will be grain costs."

Shares of Smithfield were trading at $28.34, down $1.79, in early afternoon trading on the New York Stock Exchange.