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Smithfield sees lower profit, shares fall

VIRGINIA - Smithfield Foods Inc., the world's largest hog and pork producer, on Friday warned that fourth-quarter profit will fall well short of last year's results because oversupply in the market is depressing prices.

Smithfield Foods, Inc. said that it expects to announce fiscal 2006 fourth quarter earnings per diluted share in the range of zero to $.10 for the period ended April 30, compared to $.76 per diluted share in the fourth quarter of fiscal 2005. Net income is expected to be in the range of zero to $12 million, compared to $85.4 million in last year’s fourth quarter.

Pork margins weakened significantly in the quarter as a result of the protein oversupply in the United States marketplace. In turn, these unsatisfactory conditions depressed live hog prices during the quarter. Hog market prices have averaged $41.60 in this year’s fourth quarter compared to $50.80 last year. Near the end of the quarter, however, hog prices and hog futures have rebounded on expectations of improved fundamentals in the pork sector.

Smithfield plans to report earnings on June 8.

The PigSite News Desk

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