Smithfield Earnings Preview

Motley Fool Staff
Updated

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

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Smithfield with eight of 15 analysts rating it hold. Analysts don't like Smithfield as much as competitor Pilgrim's Pride overall. Three out of six analysts rate Pilgrim's Pride a buy compared to six of 15 for Smithfield. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.

  • Revenue forecasts: On average, analysts predict $3.15 billion in revenue this quarter. That would represent a rise of 8.6% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.68 per share. Estimates range from $0.50 to $0.98.

What our community says:
CAPS All-Stars are solidly backing the stock with 85.7% giving it an outperform rating. The community at large backs the All-Stars with 82.8% awarding it a rating of outperform. Fools are bullish on Smithfield and haven't been shy with their opinions lately, logging 108 posts in the past 30 days. Despite the majority sentiment in favor of Smithfield, the stock has a middling CAPS rating of three out of five stars.

Management:
Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q4

Q3

Q2

Q1

Gross Margin

14.6%

14.3%

14.4%

12.7%

Operating Margin

8.6%

11.7%

9.3%

6.1%

Net Margin

3.2%

6.4%

4.8%

2.6%

One final thing: If you want to keep tabs on Smithfield movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time thisarticle was published

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