Smithfield Foods(US:SFD)2025-10-28 12:01Financial Performance - Sales for the three months ended September 28, 2025, were $3,747 million, a 12.4% increase from $3,334 million for the same period in 2024[7] - Gross profit for the nine months ended September 28, 2025, was $1,487 million, compared to $1,364 million for the same period in 2024, reflecting a 9.0% increase[7] - Net income from continuing operations for the three months ended September 28, 2025, was $252 million, up 20.6% from $209 million in the same period of 2024[7] - The company reported comprehensive income of $275 million for the three months ended September 28, 2025, compared to $325 million for the same period in 2024[8] - The company reported a net income of $667 million for the nine months ended September 28, 2025, down 12.2% from $760 million in the same period last year[8] - Comprehensive income attributable to Smithfield for the three months ended September 28, 2025, was $266 million, down from $331 million in the same period last year, a decrease of 19.6%[8] - For the nine months ended September 28, 2025, net income attributable to Smithfield was $660 million, compared to $749 million for the same period in 2024, a decrease of 11.9%[14] Assets and Liabilities - Total assets increased to $11,523 million as of September 28, 2025, from $11,054 million as of December 29, 2024, representing a growth of 4.2%[10] - Total current assets increased to $4,594 million as of September 28, 2025, from $4,202 million at the end of December 2024, reflecting a 9.3% growth[10] - Cash and cash equivalents decreased to $773 million as of September 28, 2025, down from $943 million at the end of December 2024, a decline of 17.9%[10] - The total shareholders' equity increased to $6,466 million as of September 28, 2025, up from $5,601 million as of September 29, 2024, representing an increase of 15.4%[13] - The balance of additional paid-in capital decreased from $4,117 million as of June 30, 2024, to $3,333 million as of September 28, 2025, a reduction of 19.1%[13] - As of September 28, 2025, total debt fair value is $1,898 million, with a carrying value of $1,985 million, compared to a fair value of $1,821 million and carrying value of $1,983 million as of December 29, 2024[128] Cash Flow and Dividends - The company’s net cash flows from operating activities of continuing operations for the nine months ended September 28, 2025, were $121 million, compared to $233 million for the same period in 2024[12] - The company paid dividends totaling $297 million during the nine months ended September 28, 2025, compared to $270 million in the same period of 2024[12] - The company declared a dividend of $99 million for the three months ended September 28, 2025, compared to $88 million for the same period in 2024, indicating an increase of 12.5%[13] Segment Performance - The Packaged Meats segment sources approximately 80% of its raw materials from the Fresh Pork segment, highlighting the interdependence of the company's operations[31] - Operating profit for the Packaged Meats segment was $226 million for the three months ended September 28, 2025, compared to $239 million in the same period of 2024, reflecting a decrease of 5.4%[35] - The Fresh Pork segment reported sales of $2,185 million for the three months ended September 28, 2025, compared to $1,951 million in the same period of 2024, marking an increase of 12%[35] - The Hog Production segment generated sales of $813 million for the three months ended September 28, 2025, up from $738 million in the same period of 2024, reflecting an increase of 10.2%[35] Operational Changes - The company completed the acquisition of a dry sausage production facility in Nashville, Tennessee, for $38 million on July 30, 2024, to enhance its value-added packaged meats business[48] - The company closed its leased Elizabeth, New Jersey dry sausage production facility on June 30, 2025, consolidating production across its network[49] - The carve-out and distribution of European operations to WH Group was completed on August 26, 2024, representing a strategic shift in the company's geographical footprint[42] - The company undertook Hog Production Reform, which included ceasing certain farm operations and reducing the size of its hog production business[54] - The company sold approximately 150,000 sows to Murphy Family Farms, which now supplies approximately 3.2 million hogs annually[55] Tax and Legal Matters - The effective tax rate for continuing operations decreased to 22.2% in Q3 2025 from 25.0% in Q3 2024, primarily due to a non-taxable gain[96] - The company is involved in ongoing antitrust litigation, with payments totaling $194 million made to settle class claims related to price-fixing allegations in the pork industry[137] Derivative Instruments and Risk Management - As of September 28, 2025, the net liability position of open derivative instruments subject to credit risk-related contingent features was $30 million[71] - The fair value of derivative instruments as of September 28, 2025, included assets of $11 million and liabilities of $76 million[73] - The company recognized pre-tax losses of $71 million on commodity contracts for the nine months ended September 28, 2025[78] Translation Gains and Other Comprehensive Income - For the three months ended September 28, 2025, the company reported translation gains of $15 million compared to translation losses of $67 million for the same period in 2024[111] - The total other comprehensive income from continuing operations for the three months ended September 28, 2025, was $23 million, compared to a loss of $93 million in the same period of 2024[111]