(RTTNews) - Tuesday, Smithfield Foods, Inc. (SFD: News ), a fresh pork and packaged meats processor, reported a net loss in its fourth quarter, compared to profit in the same quarter last year, negatively impacted by poor performance in the International and Hog Production segments, which resulted in lower sales and higher expenses mainly on high feed costs. However, the loss per share was narrower than analysts' expectation. Smithfield added that it is initiating a further reduction of 3% of U.S. sow herd, effective immediately.

Fourth-quarter net loss was $78.8 million or $0.55 per share, in comparison with net income of $2.4 million or $0.02 per share last year. Excluding prior-year's discontinued operations, quarterly loss from continuing operations was $78.8 million or $0.55 per share, compared to income from continuing operations of $1.8 million or $0.01 per share in the prior year.

On average, 12 analysts surveyed by Thomson Reuters expected the company to report a loss of $0.60 per share for the quarter. Analysts' estimates typically exclude special items.

The company noted that in the latest quarter, a benefit of $13.1 million was realized related to foreign tax credits which favorably impacted income taxes.

Quarterly sales declined to $2.85 billion from $2.87 billion in the comparable period a year ago, missing seven Wall Street analysts' consensus revenue estimate of $3.06 billion. Total segment sales dropped to $3.39 billion in the quarter from $3.45 billion a year earlier.

While announcing the third quarter results back in March, Smithfield had said that it expects the fourth quarter to be another difficult quarter with continued substantial losses in hog production. The company now said that A(H1N1) virus had no significant effect on the quarter.
Smithfield, in the preceding third quarter, reported a net loss of $103.1 million, or $0.72 per share, compared to prior year's profit, hurt by one-time items and higher feed costs. Loss from continuing operations for the quarter was $105.5 million, or $0.73 per share, on sales of $3.35 billion.

In the fourth quarter, gross profit declined to $115.0 million from prior year's $206.0 million, and the company recorded an operating loss of $91.9 million, compared to operating profit of $29.3 million last year. In the quarter, selling, general and administrative expenses increased to $195.9 million from $194.3 million a year ago.

On a segmental basis, sales from Pork rose to $2.455 billion from last year's $2.451 billion, while its operating profit declined to $110.7 million from $138.5 million a year ago. Total pork volumes increased 2.5% from the year-ago period, and pork exports increased 3.3%, but prices fell. The company noted that margins for packaged meat expanded substantially compared to last year as operational efficiencies and sales coordination began to take hold. However, weaker fresh pork margins dampened the effect of significant gains in packaged meats.

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