A sharp improvement in pig rearing results has driven Smithfield Foods back into a quarterly profit for the first time since 2008, and prompted the meat group to put a "very good" outlook on the agenda.

The US group reported earnings of $37.3m for the November-to-January period, its first quarter in the red since the February-to-April quarter in 2008.

It has run up after-tax losses totalling $380m in the intervening period.

And Larry Pope, the Smithfield chief executive foresaw a "very good year in fiscal 2011", which begins in May, as the group exploits the fruits of cutbacks in pig production, and the expected reopening of export markets closed last year because of America's H1N1 outbreak.

"Hog production [results] should be dramatically improved year over year," Mr Pope said.

'Futures trending favourably'

While the division reported an operating loss of $55.6m in the latest quarter, that represented a decline of nearly 80% on the loss a year before, and was the best performance for nearly two years.

The improvement reflected a cut in rearing costs, reflecting weaker grain markets, and higher pork prices encouraged by production cuts at Smithfield and rivals to reduce market oversupply.

Hog production losses shrank from $21 per hundredweight to $7 per hundredweight.

"Our biggest obstacle for the past two years has been the lack of profitability in our hog production segment," Mr Pope said.

"These losses have substantially diminished, and the futures markets are trending favourably for us."

Thriving exports 

Meanwhile, the pork division, enjoying its second-best ever year for foreign orders for fresh meat, should see "very solid" results in the next fiscal year, assuming export reopen as is being expected.

"Our trade representatives are actively working to fully reopen the Chinese and Russian markets. I fully expect these markets to be reopened by the end of this fiscal year," he added, signalling a May deadline.

The unit raised operating profits by 18.1% to $152.8m, driving the group's return to the black which, at earnings per share of $0.22, beat Wall Street forecasts.

And, at JP Morgan, analyst Ken Goldman, held out the prospect of Smithfield's hog production division returning to the black in the next quarter, after an eight-quarter-long losing streak.

"We believe this will be the last quarter of red ink for the segment," Mr Goldman said.

Smithfield shares closed up 1.3% at $19.23 in New York.