UPDATE 3-Smithfield Foods loss less than expected
* Q4 loss $78.8 mln, 55 cts/share
* Wall Street view 62-cent loss
* Revenue $2.85 billion vs year ago $2.87 billion
* Shares about flat (Recasts; Adds company comment, details, share price)
CHICAGO, June 16 (Reuters) - Smithfield Foods Inc (SFD.N) reported a quarterly loss on Tuesday as high feed costs continued to hurt its hog business and the recession slowed pork sales.
But the loss was smaller than expected and Smithfield's shares were about flat.
Influenza A H1N1, commonly called swine flu, briefly hurt its domestic business in May and continues to restrict exports, specifically to China, the company said.
Going forward the company expects more losses on hogs and will be cutting its breeding herd an additional 3 percent for a total 13 percent reduction in the past year in order to trim the losses.
"We will continue to experience losses, I think, in live hog production through the second quarter of this fiscal year and maybe the third, " Chief Executive C. Larry Pope said during a conference with Wall Street analysts.
Pork profits slipped during the quarter due to lower fresh pork prices, but the packaged meats segment had record profits, the company said.
Packaged meats have been helped as recession-weary consumers buy lower-cost items at supermarkets, such as hot dogs and luncheon meats, analysts said.
The company's financials and debt have been a concern of analysts and on Tuesday Smithfield said it had more than $1.1 billion in liquidity at the end of the fiscal year and had pared debt by more than $890 million.
In addition, officials said during the call that talks continue with lenders to ensure financial matters are handled before becoming serious.
J.P. Morgan analyst Ken Goldman said in a note he expects the company to raise more capital in the next few months. Goldman also noted that Smithfield's hog and pork margins were better than expected.
The Smithfield, Virginia-based company reported a loss of $78.8 million, or 55 cents per share, for the fourth quarter that ended May 3, compared with a year-ago profit of $2.4 million, or 2 cents per share. The results included a one-time gain of $13.1 million for foreign tax credits.
Wall Street analysts on average expected a 62-cent-per-share loss, according to Reuters estimates.
Revenue was $2.85 billion, compared with the year ago's $2.87 billion.
For the fiscal year, the company lost $190.3 million, or $1.35 per share, its first yearly loss since 1975.
The hog unit, the largest in the United States, had an operating loss of nearly $171 million, compared with a year ago loss of $129 million. The pork unit, also the nation's largest, earned $110.7 million, down from $138.5 million a year ago.
Smithfield, on average, lost $20 per hundredweight on hogs during the quarter, largely due to higher feed prices and expensive grain hedges.
Fearing a spike in corn prices, the company last year hedged corn purchases at about $6 per bushel through the quarter. However, corn prices later fell and traded at about $4 or less during the quarter.
Smithfield shares were down 3 cents at $11.15 in morning New York Stock Exchange trading. (Reporting by Bob Burgdorfer, editing by Dave Zimmerman)
