Smithfield Profit Plunges on Drop in Exports (Reuters)
Hog producer Smithfield Foods Inc (SFD.N), which recently accepted a $4.7- billion buyout offer from China’s Shuanghui International, posted a 63 percent drop in net profit as its exports to China and Russia fell due to concerns about a drug it uses to produce lean meat. Smithfield, whose products include Smithfield bacon and Eckrich sausages, announced that its net income fell to $29.7 million, or 21 cents per share, in the fourth quarter ended April 28, from $79.5 million, or 49 cents per share, a year earlier. Its fiscal-year fourth quarter revenues rose 3 percent to $3.32 billion. ‚??For the industry, pork exports were down to nearly every major market in the fourth quarter with volumes to China and Russia falling over ractopamine certification requirements,‚?Ě CEO Larry Pope said today. The results show Smithfield‚??s management and directors recognized the need to boost exports into China when the company agreed to be acquired by China‚??s Shuanghui International.
Clearwire Gives Dish‚??s Ergen a Nod in Billionaires’ Duel (Bloomberg)
Dish Network Corp. (DISH) Chairman Charlie Ergen‚??s won the latest round in his bid to outflank SoftBank Corp. (9984) and its fellow billionaire owner Masayoshi Son for control of money-losing, high-speed Internet network Clearwire Corp. (CLWR) and the latter company‚??s valuable airwaves. At stake for the winner is a chance to enter the U.S. wireless market. Clearwire‚??s board of directors yesterday endorsed Dish‚??s $4.40-a-share bid rather than an offer of $3.40 a share from the wireless company‚??s majority owner, Sprint Nextel Corp. (S), the third-largest U.S. wireless carrier. Dish could be worth keeping an eye on as a potential investment if it manages to thwart Tokyo-based SoftBank‚??s plan to acquire a combined Sprint-Clearwire to expand into the U.S. wireless business.
U.S. Wholesale Prices Rise in May (Detroit Free Press)
Investors looking to predict if the Federal Reserve will change its easy-money policy that has been propelling stocks upward received a fresh piece of economic news today as the U.S. Labor Department reported a 0.5 percent rise in food and gas costs in May. Otherwise, inflation was mild. The producer price index jump of 0.5% in May from April nearly offset a 0.7% decline in April from March. Specifically, gas prices rose 1.5% last month, while food costs climbed 0.6%. The index, which measures price changes before they reach the consumer, has increased just 1.7% in the 12 months ending in May. That rise is up from a 0.6% year-over-year increase in April, the smallest in 10 months. Core prices, which exclude the food and energy, rose just 0.1% in May. They are up just 1.7% in the past year, below the Federal Reserve‚??s 2% inflation target. As long as the Fed‚??s easy-money policy remains intact, U.S. equities will be cushioned somewhat from a weak economy.