SMITHFIELD, Va., Aug. 26 /PRNewswire-FirstCall/ -- Smithfield Foods, Inc. (NYSE: SFD) today announced a loss from continuing operations for the first quarter of fiscal 2009 of $28.5 million, or $.21 per diluted share, versus income from continuing operations last year of $56.6 million, or $.43 per diluted share. Sales were $3.1 billion versus $2.6 billion a year ago.

The current quarter loss from continuing operations includes a negative mark-to-market adjustment of approximately $20.1 million after-tax, or $.15 per diluted share, related to unrealized losses on changes in the fair value of the company's open commodity derivative contracts. In addition, the current quarter loss from continuing operations also includes impairment charges and operating losses totaling $5.5 million after-tax, or $.04 per diluted share, related to asset disposals by Campofrio.

Net income from continuing and discontinued operations in the first quarter was a loss of $12.6 million, or $.09 per diluted share. After-tax income from discontinued operations was $15.9 million, or $.12 per diluted share. In the first quarter of last year, net income of $54.6 million, or $.41 per diluted share, includes an after-tax loss from discontinued operations of $2.0 million, or $.02 per share.

Following are the company's sales and operating profit from continuing operations by segment (in millions):

                                                       13 Weeks Ended
                                              July 27, 2008     July 29, 2007
     Sales
        Pork                                      $2,579.2          $2,228.2
        International                                405.3             246.7
        Hog Production                               725.8             605.6
        Other                                         44.2              37.6
                                                   3,754.5           3,118.1
     Intersegment                                   (612.7)           (501.4)
           Total Sales                            $3,141.8          $2,616.7
     Operating Profit
        Pork                                         $61.7             $26.5
        International                                  5.9              14.9
        Hog Production                               (38.8)             93.0
        Other                                         (6.7)             10.7
        Corporate                                    (19.6)            (17.1)
           Total Operating Profit                     $2.5            $128.0

Pork segment operating profits more than doubled from the prior year results, even as live hog costs rose. These results reflect sharply higher fresh meat profits driven by strong export demand. Generally, the first quarter is the weakest quarter of the year for fresh pork; this was not the case in the current quarter. Overall export volume increased 124 percent over the prior year, the result of large increases in shipments to China, Russia, Japan, Mexico and the EU. Exports benefited from the impact of a weak U.S. dollar which helps make U.S. products look very inexpensive in the world markets. In addition, pork prices have risen even more significantly in many other countries, making U.S. products very competitive. Fresh pork volume rose 33 percent as the company took advantage of the export opportunities and processed more hogs.

Packaged meats profits were somewhat weaker as higher raw material costs could not be fully passed through in higher prices. Overall, packaged meats volume was flat. However, several categories of convenience-oriented products continued to grow. Spiral hams and precooked ribs experienced continued double-digit volume growth as the business continues to migrate toward the higher margin and more consumer-ready products.

The international segment recorded operating profit below last year, as raw material costs moved to higher levels. Groupe Smithfield continued to experience highly competitive market conditions throughout Europe and recorded a modest loss.