(By Balachander) Smithfield Foods Inc. (NYSE:SFD) reported quarterly earnings and sales that trailed market expectations amid drop in operating margins as weak domestic retail demand hit the meat processor's fresh pork business.
Earnings per share (EPS) of 40 cents missed Wall Street projections of 44 cents for the first quarter. Net income declined to $61.7 million from $82.1 million.
Consolidated operating margins shrank to 4 percent from 6 percent in the same period of last year amid rise in raw material costs.
Fresh pork margins were a negative 1 percent versus positive 3 percent a year ago and Hog production margins declined to 3 percent from 9 percent. Operating margins at the company's International segment were a positive 5 percent.
The Smithfield, Virginia-based company's sales were flat at $3.1 billion versus consensus estimate of a growth of 1.80 percent.
Total packaged meats volume rose 4 percent.
Cost of sales increased to $2.76 billion from $2.69 billion.
The stock, which has been trading in the 52-week range between $17.55 and $25.12, closed Friday's regular trading at $19.32.