After a more than 60 percent run-up in its stock price since it gave financial solvency assurances during its Dec. 4 teleconference with analysts, Smithfield shares fell Monday after a Wall Street analyst sharply lowered her earnings estimates for fiscal 2009.

Citing higher hog raising costs and interest expenses, Stephens Inc. analyst Farha Aslam decreased her fiscal 2009 operating earnings forecast to a loss of 50 cents per share from a profit of 9 cents per share forecast earlier. Smithfield's fiscal year ends in April, 2009.

In a note to investors, Aslam forecast Smithfield's hog production segment will lose $47 per head in its 2009 fiscal third quarter (ending in January, 2009) and lose $18 per head in its fiscal fourth quarter, as low hog prices meet high grain raising costs. Smithfield hedged a significant portion of its grain needs through April, 2009 at higher than current market levels.

Interest costs

While Wall Street has cheered Smithfield for aggressively seeking to modify its debt convenants, Aslam said it could be a costly process. Historically, companies could renegotiate loans at little or no expense, but banks are now charging hefty fees.

Aslam predicted Smithfield's interest costs at about $216 million over the next four quarters.

Smithfield shares closed Monday at $9.40 per share, down 63 cents, or 6.58 percent, on the New York Stock Exchange.