Smithfield Foods Earnings Preview

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Smithfield Foods (NYS: SFD) will try to beat its earnings estimates for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, March 8. Smithfield Foods is a hog producer and pork processor that produces and markets a number of fresh meat and packaged meats products both domestically and internationally.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Smithfield Foods, with seven of 13 rating it a buy and the remainder rating it a hold. Analysts don't like Smithfield Foods as much as competitor Pilgrim's Pride overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $3.5 billion in revenue this quarter. That would represent a rise of 9.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.67 per share. Estimates range from $0.56 to $0.79.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 85.5% giving it an "outperform" rating. The greater community is in line with the All-Stars, as 83.8% give it a rating of "outperform." Despite the majority sentiment in favor of Smithfield Foods, the stock has a middling CAPS rating of three out of five stars.

Management:
Smithfield Foods' income has fallen year-over-year by an average of more than fivefold over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Margins illustrate how efficiently a company captures portions of sales dollars. For the last two quarters, Smithfield Foods has seen a decline in operating margins year-over-year. Operating margins reflect the total sales revenue that the company retains after costs. Here are Smithfield Foods' reported margins for the last four quarters:

Quarter

Q2

Q1

Q4

Q3

Gross Margin

12.7%

13.2%

14.6%

14.3%

Operating Margin

6.8%

5.6%

8.6%

11.7%

Net Margin

3.6%

2.7%

3.2%

6.4%

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Earnings estimates provided by Zacks.

At the time this article was published

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