(By Balachander) Smithfield Foods Inc. (NYSE:SFD) reported quarterly earnings that trailed market expectations amid drop in operating margins and the meat processor said it will repurchase a further $250 million of its shares. Shares fell 4.29 percent in premarket trading on Thursday.
On an adjusted basis, earnings per share (EPS) of 43 cents missed Wall Street projections of 53 cents.
Consolidated operating margins shrank to 5 percent from 9 percent in the same period of last year amid rise in raw material costs. Fresh pork margins fell sharply to 1 percent from 10 percent and Hog production margins declined to 5 percent from 12 percent.
The Smithfield, Virginia-based company earned $79.5 million or 49 cents a share for the fourth quarter, down from $98.4 million or 59 cents per share in the year-ago quarter. Results for both the quarters included charges.
Sales grew 3 percent to $3.2 billion versus consensus estimate of $3.26 billion.
Cost of sales increased 8 percent to $2.87 billion.
The stock, which has been trading in the 52-week range between $17.79 and $25.12, closed Wednesday's regular trading at $19.57.