* Q4 adj EPS 85 cents vs est 82 cents
* Rev $3.12 billion vs $2.91 bln last year
* To buy back $150 mln of common stock in 2 years
* Exports to Asia help drive profits
* Shares up 5.5 pct (Adds analysts’ comments, financial details, updates stock price)
By Bob Burgdorfer
CHICAGO, June 16 (Reuters) - U.S. hog and pork producer Smithfield Foods Inc SFD.N reported a better-than-expected fourth-quarter profit, and its first annual profit in three years, as strong pork exports and a cut in the hog supply lifted selling prices.
The company projected that the hog unit, the nation’s largest, should be profitable this fiscal year, helped by hedging on feed costs. The fiscal year ends in April 2012.
Shares were up 5.5 percent at $21.52 in early afternoon on Thursday. For the just-completed year, Smithfield earned $521 million, or $3.12 per share, compared with the previous year’s loss of $101.4 million, or 65 cents a share.
The results and positive hog outlook had analysts raising estimates for the current year.
“Fiscal year 2011 was outstanding,” Tim Ramey, analyst with D.A. Davidson, said in a note..
Ramey reiterated his “buy” rating and raised his fiscal year 2012 estimate to $3.60 per share from $3.50, due to expected better results on hogs.
Pork exports have been the key driver for Smithfield and other U.S. pork producers as a weak dollar and less global production have turned foreign buyers to the United States.
“I think double-digit increases in exports is very doable for this industry,” Chief Executive C. Larry Pope told Wall Street analysts on a conference call.
Smithfield has been selling pork to China, mostly non-meat items such lower-priced internal organs, but said sales could improve as rival shippers in Europe cut production.
The U.S. Department of Agriculture last week raised its estimate for 2011 U.S. pork exports to 4.87 billion pounds, up 15 percent from 2010.
Pope said domestic meat sales have held despite higher prices needed to cover increased production costs, due largely to $7 per bushel corn.
“We are seeing some rotation but not to anywhere the degree I thought it would be,” Pope said of consumers switching to lower-cost foods.
USDA this week said average retail pork price in May was a record $3.484 per lb, up from April’s record $3.377.
“Domestic demand has turned more positive,” said Jim Robb, economist with the Livestock Marketing Information Center. “Consumers have been sticking with red meat so far at grocery stores.”
Smithfield’s fourth-quarter profit was $98.4 million, or 59 cents per share, versus a year-earlier loss of $4.6 million, or 3 cents a share.
Excluding items, the company earned 85 cents a share.
Revenue for the Smithfield, Virginia-based company was $3.12 billion compared with $2.91 billion a year ago.
Analysts on average expected a profit of 82 cents a share on revenue of $3.23 billion, according to Thomson Reuters I/B/E/S.
The company said it will buy back $150 million in common stock over the next two years, but during the call Pope said purchases could start soon. (Additional reporting by Viraj Nair in Bangalore; Editing by Roshni Menon, Derek Caney and Matthew Lewis)