Sept 8 (Reuters) - Smithfield Foods said on Tuesday its fresh pork segment is expected to swing to an adjusted operating loss in the third quarter, due to persistent pressure from lower hog prices and a shrinking industry market spread amid cautious spending.
Shares of Smithfield fell nearly 2% in extended trading after the company also forecast lower current-quarter adjusted operating profit at its hog production business from a year ago.
Here are some details:
• Smithfield said the falling USDA pork
cutout and hog prices have squeezed industry margins, prompting a more "conservative view of segment profitability".
• "The change in our outlook is driven by external market conditions within portions of the pork value chain," said CEO Shane Smith.
• The U.S. pork processor now expects to report a third-quarter adjusted operating loss in the range of $70 million to $90 million in fresh pork segment, second largest revenue generator, after posting a profit of $10 million a year ago.
• It also forecast quarterly adjusted operating profit in hog production business between $25 million and $45 million, compared with $89 million a year earlier.
• However, it kept intact the fiscal 2026 adjusted operating income forecast for packaged meats - the company's largest segment, at between $1.08 billion and $1.15 billion.
• It also expects to report total company adjusted operating income for three months ending September in the range of $115 million to $175 million versus $310 million in the same period last year.
• The company, which has been navigating a cautious consumer spending environment, also said it was "disappointed" in how the commodity market dynamics would impact its near-term results.
• Last month, Smithfield cut its annual total sales and adjusted operating profit forecasts. It is expected to participate in the Barclays Global Consumer Conference on Thursday.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shailesh Kuber)
