Source: Chris Scott, MEATINGPLACE, 8/30/11

Lower-than-expected pork processing margins prompted industry analyst Christina McGlone of Deutsche Bank to lower her projections for Smithfield Foods’ earnings in the first quarter of fiscal 2012, but she also raised the estimate for the second quarter of the new year.

McGlone lowered the first quarter estimate to 69 cents a share from 98 cents for the period ending Jan. 31, 2012, noting assumed aggressive hog hedges and lower pork processing margins. But she also raised the estimate for the second quarter to 84 cents a share from 69 cents because of expected stronger export demand from China, Japan, Mexico and South Korea. McGlone added that the fiscal 2012 earnings estimate has been reduced to $2.59 a share from $2.73. The figure is slightly higher than the consensus estimate of $2.48 a share.

Smithfield Foods is expected to post hog production profits of $15 a head and retain a target stock price of $26 a share in fiscal 2012, McGlone said.

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