Source:  Lisa M. Keefe, MEATINGPLACE.COM, 9/8/09

Most companies reporting a quarterly net loss of $107.7 million on revenues for the period of $2.7 billion would be chastened, but Smithfield Foods Inc. CEO C. Larry Pope was characteristically ebullient in an earnings conference call with analysts and the media.

"Our quarter was substantially better than the reports of the bottom-line results," he said.

On the down side, Pope noted that the fire at Smithfield's Patrick Cudahy unit in July has introduced inefficiencies and higher costs that are "significant but hard to determine"; the last of the company's high grain costs dating to last year are working their way through the company's hog inventory; and the company struggled through the summer with the fallout of last spring's H1N1 outbreak and the subsequent closing of several export markets.

On the other hand, the company's packaged meats business posted a return of 16 cents a pound, reporting net profits of $107.8 million on revenues of $1.2 billion; this was the first quarter that the results of Smithfield's packaged meats business were broken out. A combination of savings and lower-than-expected costs associated with the company's ongoing restructuring efforts contributed to the bottom line. And Pope believes the hog production industry may be seeing a turn in the market, with rising hog slaughter numbers — although he also noted he's not relying on that trend to continue.

Overall, net loss was 75 cents per share, compared with a loss of 22 cents per share for the same period a year earlier. After adjusting for significant items, the loss was 56 cents per share, in line with analysts' estimates.

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