Smithfield Foods Inc., the U.S. pork producer that China’s Shuanghui International Holdings Ltd. is trying to buy for $4.7 billion, posted earnings that missed analysts’ estimates after an increase in feed costs and lower demand in some foreign markets.
Earnings dropped to 27 cents a share in the quarter ended July 28 from 40 cents a year earlier, the Smithfield, Virginia-based company said today in a statement. That trailed the 47-cent average of five estimates compiled by Bloomberg. Fiscal first-quarter sales rose 9.8 percent to $3.39 billion, beating the $3.19 billion average of five estimates.
Higher hog-raising costs affected earnings in Eastern Europe and Mexico while demand declined in Japan, China and Russia, Chief Executive Officer C. Larry Pope said in the statement.
“Normal seasonal weakness in fresh pork was exacerbated by declines in key export markets,” Pope said.
Smithfield dropped 0.1 percent to $33.92 in New York. Hong Kong-based Shuanghui International announced its $34-a-share cash offer on May 29.
The Committee on Foreign Investment in the U.S. today gave its clearance for the deal. Smithfield shareholders will vote on the takeover at a Sept. 24 meeting. The companies said they expect the transaction to close shortly thereafter.