Low expectations can do wonderful things for a stock.

Take Premium StandardFarms (NASDAQ:PORK), for example. This was a very tough quarter for the company, but analysts undershot the mark, and the company appeared to outperform their more dismal predictions. Interestingly, one analyst, John McMillin at Prudential, had the quarter pegged perfectly -- which makes me wonder what the others were missing.

Rather than ponder that question, let's move to the results. Sales were down 2%, and overall margins took a pounding. Consequently, operating income fell 45%, and reported earnings per share dropped more than 40%.

The basic problem was the combination of lower hog prices and higher production expenses. The processing business saw prices drop about 7%, while the production business saw prices slump 17% lower. While both units showed respectable unit volume increases, they both faced too much pricing damage to overcome. Same goes for the costs side -- lower feed prices helped, but higher utility, packaging, shipping, and energy costs did not.

During the conference call, management noted that companies like Premium Standard really couldn't be fairly or accurately evaluated on a quarter-to-quarter basis. I completely agree. Short-term ups and downs are just part of the cycle in this business; shareholders should either be nimble traders or patient long-term owners. Unfortunately, Premium Standard's brief history as a public company makes it a little harder to evaluate the company's long-term qualitative aspects relative to rivals such as Tyson (NYSE:TSN), Smithfield (NYSE:SFD), and Hormel (NYSE:HRL).

Nonetheless, the company might still be worth some further due diligence. These are tough times for protein producers, and tough times are exactly when you long-term value folks should be sharpening your pencils and digging into these companies' financials. While Premium Standard is not Smithfield or Hormel, a look at the historical valuations for those two companies does suggest that this stock could be an interesting long-term idea.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).