The 10-second takeaway
For the quarter ended Jan. 27 (Q3), Smithfield Foods beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. GAAP earnings per share grew significantly.
Gross margins dropped, operating margins dropped, net margins were steady.
Smithfield Foods logged revenue of $3.58 billion. The 12 analysts polled by S&P Capital IQ wanted to see a top line of $3.51 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.58. The 12 earnings estimates compiled by S&P Capital IQ anticipated $0.50 per share. GAAP EPS of $0.58 for Q3 were 18% higher than the prior-year quarter's $0.49 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 9.2%, 180 basis points worse than the prior-year quarter. Operating margin was 3.6%, 200 basis points worse than the prior-year quarter. Net margin was 2.3%, much about the same as the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.33 billion. On the bottom line, the average EPS estimate is $0.54.
Next year's average estimate for revenue is $13.19 billion. The average EPS estimate is $2.09.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 206 members out of 245 rating the stock outperform, and 39 members rating it underperform. Among 88 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 76 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 hold, with an average price target of $25.75.
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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. The Motley Fool has no position in any of the stocks mentioned. 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.