SFT reported a loss from continuing operations for the second quarter of fiscal 2010 of $26.4 million, or $(.17) per diluted share, versus a loss from continuing operations last year of $32.5 million, or $(.23) per diluted share. In last year's second quarter, they reported income from discontinued operations, net of tax, of $34.2 million, or $.24 per diluted share, related to the operations and sale of its beef business.
There were a number of significant items that affected the current quarterly results. Some of those reasons include a higher than normal effective tax rate (increased EPS by $.14 per diluted share), restructuring and plant impairment charges in the Pork segment (decreased EPS by $.03 per diluted share), and a loss on the extinguishment of the European credit facility (decreased EPS by $.02 per diluted share). After adjusting for these items, non-GAAP second quarter fiscal 2010 EPS was $(.26).
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Commentary
"Our packaged meats business continued to deliver record profits in the second quarter. This is the part of the business we have focused on and it is repeatedly delivering superior results," said C. Larry Pope, president and chief executive officer. "The restructuring plan is in full swing and achieving benefits that are ahead of schedule with estimated profit improvement of approximately $17 million in the second quarter of fiscal 2010. We expect this plan will deliver the targeted $55 million of profit improvement this year, after applicable restructuring expenses, and the full $125 million of annual benefits going forward," he said.
"Unfortunately, these results were offset by continued losses in hog production. Although raising costs declined again this quarter, domestic hog prices were sharply lower as oversupply conditions in the U.S. persisted," he continued.
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