The 10-second takeaway
For the quarter ended Jan. 29 (Q3), Smithfield Foods met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Smithfield Foods reported revenue of $3.48 billion. The 13 analysts polled by S&P Capital IQ foresaw sales of $3.50 billion on the same basis. GAAP reported sales were 9.2% higher than the prior-year quarter's $3.19 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.69. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.64 per share on the same basis. GAAP EPS of $0.49 for Q3 were 60% lower than the prior-year quarter's $1.21 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 10.9%, 370 basis points worse than the prior-year quarter. Operating margin was 5.5%, 220 basis points worse than the prior-year quarter. Net margin was 2.3%, 410 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.30 billion. On the bottom line, the average EPS estimate is $0.60.
Next year's average estimate for revenue is $13.16 billion. The average EPS estimate is $2.66.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 198 members rating the stock outperform and 39 members rating it underperform. Among 83 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 71 give Smithfield Foods a green thumbs-up, and 12 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Smithfield Foods is outperform, with an average price target of $27.92.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.