Smithfield Foods, Inc., a big employer locally, performed close to its earnings goal for the fourth quarter ended April 29, raised expectations for fiscal year 2008 and said it is still on the lookout to cut costs as livestock feeding prices rise.

A highlight of the report was the performance by the part of Smithfield that includes plants in Nebraska acquired last year from ConAgra.

Smithfield projected big plans for the packaged meats part of its business, but the potential impact those may have on Nebraska operations was not made clear. 

Smithfield employs almost 500 people at its Cook’s Ham smoked meats plant in Lincoln, which it bought from ConAgra in January of last year, and almost 2,000 at its Farmland Foods pork plant in Crete.     In August of last year, Smithfield bought Armour-Eckrich plants that employ almost 200 people making dry sausage and pepperoni in Omaha and almost 400 processing sausage, bacon and meatballs in Hastings.  

The largest U.S. pork producer and processor, which has been raising prices to combat rising feeding costs, expects a stronger year in fiscal 2008 than in the just-ended fiscal year 2007, said C. Larry Pope, president and chief executive.

The company earned $37 million, or 33 cents per share, in its fiscal fourth quarter, ended April 29, compared with $1.1 million, or 1 cent a share, a year earlier.

Excluding one-time items, income from continuing operations was 34 cents a share.  The results were within the company's forecast last week of 30 to 35 cents per share.

Sales rose 15 percent to $3.06 billion. Wall Street on average expected $3.12 billion, according to Reuters Estimates

Substantially improved margins in both packaged meats and fresh pork produced considerable gains in the pork segment.

Packaged meats volume grew 31 percent, primarily the contributions of Armour-Eckrich, acquired last year, including the Omaha and Hastings plants. 

Some product categories, such as pre-cooked bacon, lunch meats, smoked sausage and dry sausage, had growth of virtually double the prior year, the company said.

Pork segment earnings were above those of last year, reflecting the prior year’s restructuring charges, the successful integration of Armour-Eckrich and higher margins in fresh pork and packaged meats. 

Hog production results were well below last year as raising costs increased. As a result of the impact of circovirus, the number of head marketed domestically fell 6 percent. Live hog market prices domestically averaged almost $48 per hundredweight versus $46 in the prior year. But raising costs in the U.S. were reported at $43 per hundredweight versus $39 per hundredweight last year.

The company said it is building sow herds in Poland and Romania at a rapid pace.

Smithfield completed the acquisition of Premium Standard Farms, a vertically integrated hog producer and pork processor, on May 7, and said it is still evaluating the assimilation.

“Considering the negative impact of increased grain prices on all of our live production operations, I am very pleased with the results for the fourth quarter and the full fiscal year, particularly the international and pork segments,” said Pope.

The acquisitions from last year have contributed immediately and positively to earnings, he said.

“We are reshaping the company through integrating these acquisitions, both branded packaged meats businesses and executing a strategy to realign and rationalize our manufacturing capacities,” said Pope.

Smithfield continues to evaluate manufacturing operations to drive out significant costs and become a low-cost, highly-efficient producer, he said.

"We plan additional changes to realign capacity,” he said. “Our strategy is to invest in new technologies and processes to improve operating efficiencies and enable our packaged meats business to become a much stronger component of our profits."

Spokesman Jerry Hostetter would not comment on what thos plans might mean for any of the Nebraska plants.

Journal Star reporter Richard Piersol and the Associated Press contributed to this report.