Analysts Lower Smithfield’s Outlook

Shares of hog and beef producer Smithfield Food Inc. were down Monday after analyst slashed the company's projected earnings based on weak hog prices and growing hog supply. BB&T downgraded Smithfield from a buy to a hold, and cut its current quarter earnings target to $0.17/share from $0.48/share. "Hog-production profitability has deteriorated dramatically into loss-making territory, and we do not foresee a quick recovery," said BB&T analyst Heather Jones. In addition, Davenport Equity Research cut its quarterly forecast from $0.40 to $0.30 and Bank of America lowered its estimates to $0.41 from $0.56. The U.S. Agriculture Department reported last month inventories for hogs and pigs increased 3% from last year. Live hog prices are down 20% since August. China could change the demand concerns if it chooses to purchase more U.S.-made pork, analysts added. Shares of Smithfield dropped 4% to $30.27 Monday.

Sources: MarketWatch
Commentary: Smithfield Foods: King Pig Among Pork Producers • More on Pork, China and Smithfield Foods
Stocks/ETFs to watch: SFD. Competitors: HRL, TSN. ETFs: FXG
Earnings call transcript: Smithfield Foods F1Q08 (Qtr End 7/29/07)

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