Smithfield Foods (NASDAQ:SFD) Issues Earnings Results

Key Points

• Smithfield Foods reported quarterly EPS of $0.26, narrowly exceeding analysts’ consensus estimate of $0.25.
• Overall results weakened substantially: sales fell 8.3% to $3.44 billion, operating profit dropped 59% to $127 million, and Fresh Pork posted an $89 million operating loss amid softer commodity markets.
• The company maintained its $1.25 annualized dividend, equivalent to a 6.8% yield, while analysts held a consensus “Hold” rating with a $26 price target; Smithfield also reduced its full-year outlook.

Smithfield Foods (NASDAQ:SFD - Get Free Report) posted its earnings results on Tuesday. The company reported $0.26 earnings per share for the quarter, topping analysts' consensus estimates of $0.25 by $0.01, Zacks reports. Smithfield Foods had a net margin of 6.84% and a return on equity of 15.55%.

Smithfield Foods Stock Performance

NASDAQ:SFD opened at $18.31 on Tuesday. The company has a market capitalization of $7.21 billion, a PE ratio of 6.83 and a beta of -0.41. The company has a 50 day simple moving average of $20.16 and a two-hundred day simple moving average of $24.09. The company has a debt-to-equity ratio of 0.20, a quick ratio of 1.34 and a current ratio of 2.56. Smithfield Foods has a fifty-two week low of $18.09 and a fifty-two week high of $29.81.

Smithfield Foods Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, August 27th. Investors of record on Thursday, August 13th were issued a $0.3125 dividend. The ex-dividend date was Thursday, August 13th. This represents a $1.25 annualized dividend and a yield of 6.8%. Smithfield Foods's dividend payout ratio is presently 46.64%.

Wall Street Analyst Weigh In

Several research firms have recently issued reports on SFD. The Goldman Sachs Group reaffirmed a "buy" rating and set a $32.00 price target on shares of Smithfield Foods in a research note on Wednesday, August 12th. Barclays reduced their price objective on shares of Smithfield Foods from $31.00 to $29.00 and set an "overweight" rating on the stock in a research note on Wednesday, September 9th. Weiss Ratings cut shares of Smithfield Foods from a "hold (c+)" rating to a "hold (c)" rating in a research note on Tuesday, September 29th. Bank of America downgraded Smithfield Foods from a "buy" rating to a "neutral" rating and set a $21.00 price objective for the company. in a report on Friday, October 9th. Finally, Stephens began coverage on Smithfield Foods in a research report on Wednesday, September 30th. They set an "equal weight" rating and a $22.00 target price for the company. Three investment analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus price target of $26.00.

Smithfield Foods News Summary

Here are the key news stories impacting Smithfield Foods this week:

• Positive Sentiment: Adjusted third-quarter earnings per share were $0.26, roughly in line with the FactSet estimate and slightly above the $0.25 consensus cited by another report. Smithfield Foods Q3 earnings flash
• Positive Sentiment: The Packaged Meats segment remained resilient: third-quarter operating profit increased to $230 million from $226 million, while its margin improved to 11.6%. Smithfield expects the segment to deliver more than $1 billion in operating profit for a fifth consecutive year. Smithfield Foods reports third-quarter results
• Positive Sentiment: Smithfield completed its acquisition of Nathan’s Famous, expanding its branded packaged-food portfolio. Operating cash flow also rose to $365 million through the first nine months, up from $121 million a year earlier, supporting investment and the anticipated $1.25 annual dividend rate. Smithfield Foods packaged meats profit and outlook
• Neutral Sentiment: Smithfield announced a $250,000 scholarship program and reported a state-fair hunger-relief initiative providing 170,000 meals. These efforts may support its community reputation but are unlikely to materially affect near-term financial results. Smithfield Foods scholarship program
• Negative Sentiment: Consolidated third-quarter sales fell 8.3% to $3.44 billion, while operating profit plunged 59% to $127 million and net income dropped to $91 million from $252 million. Fresh Pork posted an $89 million operating loss, compared with $10 million of profit a year earlier, reflecting softer pork and hog commodity markets. Smithfield Foods earnings results
• Negative Sentiment: Smithfield reduced its outlook to reflect continued commodity pressure, forecasting full-year sales down low-single-digits and Fresh Pork adjusted results ranging from a $50 million loss to breakeven. The weaker upstream performance is the primary reason the overall report is weighing on SFD despite the packaged-meats gains. Smithfield Foods cuts sales forecast

Smithfield Foods Company Profile

Smithfield Foods, Inc is a food company engaged in pork production and the manufacture and sale of packaged meats. Its operations include hog production, fresh pork processing, and the preparation of bacon, ham, sausage, hot dogs, deli meats and other ready-to-cook or ready-to-eat products.

The company sells products under brands that include Smithfield, Eckrich, Nathan's Famous and Farmland, as well as through private-label and foodservice channels. Its products are distributed through grocery retailers, restaurants, foodservice operators and other commercial customers in the United States and international markets.

Founded in Smithfield, Virginia, in 1936, Smithfield Foods expanded through acquisitions and became one of the world's largest pork processors and hog producers.

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