biz.yahoo.com/ap/080926/smithfield_foods_mover.html?.v= -
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Published on: 9/26/2008
Last Visited: 9/26/2008
Stephens Inc. analyst Farha Aslam said in a research note Friday the slide is expected given the credit concerns announced Thursday by Pilgrim's Pride Corp., the nation's largest chicken producer.
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Aslam said given credit concerns for the Smithfield, Va.-based company, its shares are "likely to remain volatile" given both meat producers' poor profitability and leveraged balance sheets.She said further hurting matters are heavy hog inventories and concern that exports may be slowing down.Both of those factors will push prices down for hogs.
"If this is the case the company may miss earnings estimates unless it has hedged some of its hog production," she wrote.
But Smithfield doesn't disclose its hedge positions and earnings expectations are low, which is causing the financing concerns, she wrote.
The company recently swung to a loss in its fiscal first quarter on the high commodity costs.