On February 19th 2010 Seaboard Corporation (SEB) released results for Q4 and FY 2019 ending December 31st 2019. The company is a conglomerate with segments dedicated to pork production, grain milling, commodity trading, marine transport and power generation. Seaboard owns half the equity in Butterball LLC.
For FY 2019 SEB earned $283 million on revenue of $6,840 million with an EPS of $242.78. Comparable values for FY 2018 were a loss of $17 million on revenue of $6,843 with an EPS of ($14.61) Seaboard has a market capitalization of $4.55 billion with 78 percent of equity held internally. The 12-month trailing operating margin was 0.8 percent with a profit margin of 0.3 percent. Return on assets and equity were below one percent. During the past 52 weeks share price has ranged from $3,538 to $4,743 with a 50-day moving average of $3,999.
Seaboard owns half of Butterball LLC. and the performance of this non-incorporated subsidiary, producing 0.5 million tons of product annually, is reflected in the Seaboard Corp. SEC Q10 submission. For FY 2019 Butterball lost $42 million compared to a loss of $32 million in FY 2018.
The SEC 10-K report includes the following statement:- The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball. The increase in loss from affiliate for 2019 compared to 2018 was primarily the result of higher production and other costs, including interest, partially offset by higher prices for turkey products sold. Management is unable to predict future market prices for turkey products or the cost of feed. Based on market conditions, management currently cannot predict if this segment will be profitable in 2020.
The increase in income from affiliate for 2018 compared to 2017 was primarily the result of higher logistics and production costs and lower volumes of turkey products sold in 2018, partially offset by Seaboard’s proportionate share of the Illinois plant closure during 2017. Butterball closed a further processing plant located in Illinois and recognized fixed asset impairment charges and accrued severance.