Atlanta, GA 6/14/12 (StreetBeat) – Smithfield Foods (NYSE:SFD) shares sank 7% to $18.17 Thursday morning after the nation's largest pork producer reported its profit margin thinned during the quarter ended April 29. Smithfield, whose brands also include Armour and Eckrich, said softer retail demand for its pork products battered its fresh pork margins, which came in at 1% of sales during the quarter. That was down from 10% in the same 2011 period. Overall, Smithfield's gross margin slid to 10.7% from 14.6%.
Despite the recent setback, Smithfield CEO Larry Pope said cheaper feed-grain costs, strong pork exports and heightened consumer marketing for its packaged meats should benefit the company over the next 12 months. "We expect profitability to improve as we move through the summer months and into the fall when margins are traditionally very good," Pope said in a statement. Smithfield now down 25% since Jan. 1, while the S&P 500 is up 5%.
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