SMITHFIELD, Va. -- Smithfield Foods Inc. announced today that income from continuing operations for the third quarter of fiscal 2007 was $60.4 million, or $.54 per diluted share, vs. income from continuing operations last year of $75.0 million or $.67 per diluted share. Sales were $3.3 billion versus $2.9 billion a year ago.

Income from continuing operations for the nine-month period was $144.0 million, or $1.29 per diluted share, compared to $175.6 million, or $1.57 per diluted share, last year. Sales for the nine months totaled $8.9 billion versus $8.7 billion in the same nine-month period of the prior year.

The company attributed net income of $.04 per diluted share of this year's third quarter results to a lower estimate of its annualized income tax rate. The lower estimate is due to the retroactive reinstatement of tax credits signed into law in the current quarter combined with higher earnings estimates in international operations subject to lower average tax rates. Last year's third quarter results include an after-tax loss from discontinued operations of $4.0 million, or $.04 per diluted share. Net income for fiscal 2006 year- to-date results includes a pre-tax charge of $16.3 million, or $.09 per diluted share, related to the East Coast restructuring at Smithfield Packing Company.

"Given the adverse conditions in hog production and cattle feeding, I am reasonably satisfied with our third quarter results," said C. Larry Pope, president and chief executive officer. "I am particularly pleased with the results in our international operations. In addition, our recent acquisitions and investments in Sara Lee European Meats, Cook's, Armour Eckrich and Butterball have all produced immediately accretive results," he said.

"Looking forward, the recent rise in the price of corn, as well as other grain costs, will have a significant impact on our business. Corn prices in the range of $4 per bushel will likely remain for some time. In spite of increased raising costs, the futures markets indicate that hog production should continue to be profitable for several more quarters," Pope said. "While the fresh meat complex remains challenging, we have put in place strategies to continue to improve margins in our packaged meats business. Our international operations are just beginning to deliver and our beef operations routinely outperform the industry. All of this bodes well for our long-term future. We have said many times that we will not be distracted by the ups and downs of the near-term business, but will focus on the longer term.

"Over the near term, I remain cautious; however, over the long term, I am very optimistic."

With sales of $11 billion, Smithfield Foods is the leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. Through joint ventures, the company is the largest producer of cattle and the largest producer and processor of turkeys.

SOURCE: Smithfield Foods, Inc. via PR Newswire.