SHAWNEE MISSION, Kan. — Net income at Seaboard Corp. in the second quarter ended July 3 was $77,604,000, equal to $63.21 per share on the common stock, up 188% from $26,919,000, or $21.76 per share, in the same period a year ago. Net sales for the quarter totaled $1,048,463,000, up 21% from $869,830,000 in the same period last year.
For the first six months net income was $140,382,000, or $114.02 per share, up sharply from $42,892,000, or $34.64 per share. Net sales totaled $2,068,739,000, up 16% from $1,787,398,000.
Operating income of the Commodity Trading and Milling Division of Seaboard Corp. in the second quarter ended July 3 rose sharply to $19,523,000 from $5,350,000, reflecting mark-to-market accounting of the company’s derivative contracts. Excluding mark-to-market adjustments, operating income in the quarter increased 21% to $8,800,000.
For the first six months of fiscal 2010, operating income in the division totaled $42,200,000, up from $18,500,000. Excluding mark-to-market adjustments, operating income in the first half was $22,700,000, up from $16,800,000.
Division sales totaled $405,600,000 in the quarter, up 13% from $360,100,000. For the first half, sales rose 10% to $813,700,000 from $741,000,000.
“The increases are primarily the result of increased volumes of commodities sold, principally corn and, to a lesser degree, wheat for the six-month period,” Seaboard said in an Aug. 10 filing with the Securities and Exchange Commission. “Partially offsetting the increase were price decreases for commodities sold by the commodity trading business to third parties, especially for corn and, to a lesser degree, soybean meal and also, for the first six-month period, wheat.”
In late March, Seaboard acquired a 50% non-controlling interest in an international commodity trading business in North Carolina for approximately $7.7 million, and in late July the company finalized an agreement to invest in a bakery to be built in Central Africa. Seaboard said it will have a 50% non-controlling interest in the bakery, which is expected to cost approximately $58 million.
Operating income in the company’s Pork segment soared to $58,600,000 in the second quarter, up from $4,000,000 in the same period a year ago. For the first half, income totaled $85,000,000, which compared with a loss of $13,100,000 in the same period of 2009.
“The increases primarily relate to higher sales prices and, to a lesser extent, lower feed costs, partially offset by higher costs for hogs purchased from third parties,” Seaboard said. “Management is unable to predict future market prices for pork products or the cost of feed and hogs purchased from third parties.”
Sales in the Pork segment totaled $348,300,000 and $666,200,000 in the second quarter and first half, respectively, up from $270,200,000 and $533,000,000, in the respective year-ago periods.
In the company’s Sugar segment, operating income totaled $9,500,000 in the second quarter, which compared with a loss of $1,100,000 in the same period of fiscal 2009. For the first half, operating income rose to $20,800,000 from $1,200,000. Seaboard said the increases reflected higher margins from the increase in sugar and alcohol prices, as well as a charge related to the write-down of citrus inventories, the integration and transformation of land previously used for citrus production into sugar cane production and related costs.
Net sales for the Sugar segment in the second quarter rose 28% to $45,000,000 from $35,200,000, and for the first half climbed 28% to $98,900,000 from $77,200,000.