The 10-second takeaway
For the quarter ended Oct. 28 (Q2), Smithfield Foods missed estimates on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted slightly and GAAP earnings per share shrank significantly.
Margins shrank across the board.
Smithfield Foods booked revenue of $3.23 billion. The 13 analysts polled by S&P Capital IQ looked for sales of $3.30 billion on the same basis. GAAP reported sales were 2.6% lower than the prior-year quarter's $3.31 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.61. The 13 earnings estimates compiled by S&P Capital IQ predicted $0.45 per share. GAAP EPS of $0.07 for Q2 were 91% lower than the prior-year quarter's $0.74 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 11.7%, 110 basis points worse than the prior-year quarter. Operating margin was 5.3%, 150 basis points worse than the prior-year quarter. Net margin was 0.3%, 330 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.49 billion. On the bottom line, the average EPS estimate is $0.50.
Next year's average estimate for revenue is $13.18 billion. The average EPS estimate is $2.14.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 203 members out of 243 rating the stock outperform, and 40 members rating it underperform. Among 82 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 68 give Smithfield Foods a green thumbs-up, and 14 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Smithfield Foods is hold, with an average price target of $21.80.
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