Source:  Lisa M. Keefe, MEATINGPLACE.COM, 8/11/10

Greatly improved sales and profits in its pork segment led to a significant overall improvement in Seaboard Corp.’s financial results for the second quarter and first half of 2010.

The diversified company -- with operations in commodity grains, sugar and marine operations, as well as hog production and pork processing -- posted net earnings for the second quarter were $77.6 million, nearly three times the results for the same period in 2009, when Seaboard reported $26.9 million in net earnings. Net sales for the period were $1.05 billion, up 20.5 percent over the same period a year earlier.

For the six months, Seaboard’s net earnings were $140.4 million, a 227 percent jump over net earnings for the same period last year. Total net sales were $2.07 billion, compared with $1.8 billion in 2009, an increase of 15 percent.

The increases “primarily reflected an increase in sale prices for pork products” and higher pork segment margins, as well as increased commodities trading volumes and improved results fin the company’s marine segment, Seaboard said in notes to its quarterly filing with the Securities and Exchange Commission.

In the pork segment specifically, Seaboard reported net sales of $348.3 million for the quarter and $666.2 million for the first half, increases of 28.9 percent and 25 percent, respectively. The segment’s operating income for the quarter was $58.6 million, compared with operating income of just $4 million for the second quarter in 2009. For the first half, the segment turned in an operating profit of $85 million, compared with an operating loss of $13.1 million a year ago.

“The increases primarily reflect an increase in overall sales prices for pork products … and, to a lesser extent, lower feed costs, partially offset by higher costs for hogs purchased from third parties,” the company said in its SEC filing.

“Management is unable to predict future market prices for pork products or the cost of feed and hogs purchased from third parties. However, management anticipates positive operating income for the remainder of 2010.”

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