On August 2nd Seaboard Corporation (SEB) filed SEC Form 10-Q reporting results for Q2 of FY 2022 ending July 2nd. The company is a conglomerate with segments dedicated to pork production, grain milling, commodity trading, marine transport and power generation. Seaboard owned 50 percent of the equity of Butterball LLC at the end of the first quarter with warrants to purchase an additional five percent of the shares, expiring in 2025. On April 19th Seaboard exercised rights to purchase the additional equity thereby acquiring a controlling interest with 55 percent of the equity of Butterball LLC.
For Q2 FY 2022 SEB earned $108 million on revenue of $2,973 million with an EPS of $92.53. Comparable values for Q2 of FY 2021 ending July 3rd were net income of $176 million on revenue of $2,430 million with an EPS of $151.56
On July 2nd Seaboard posted total assets of $7,810 million with long-term debt and lease obligations of $1,399 million. Seaboard has a market capitalization of $4,620 million with 79 percent of equity held internally. The 12-month trailing operating margin was 5.1 percent with a profit margin of 5.0 percent. Return on assets and equity were 4.3 and 11.6 percent respectively. During the past 52 weeks share price has ranged from $3,535 to $4,400 with a 50-day moving average of $3.930.
Effective April 2nd Seaboard owned half of Butterball LLC ranked as the second largest turkey producer in the U.S. The performance of this now-incorporated subsidiary, producing 850 million tons of RTC product in 2021, is reflected in the Seaboard Corp. SEC Q-10 submission. For Q2 FY 2022 Butterball posted sales of $417 million compared to $371 million in Q2 FY 2021. Net income attained $21 million generating a profit margin of 5.0 percent compared to a loss of $(7) million for the corresponding 2nd Quarter of 2021. As of July 2nd 2022 Butterball LLC posted assets of $1,100 million.
The SEC 10-K report includes the following statement:- “The Turkey Segment, accounted for using the equity method, represents Seaboard’s investment in Butterball, LLC. The increase in income from affiliates for the three and six month periods of 2022 compared to the same period in 2021 was primarily the result of higher selling prices, partially offset by lower volumes of turkey products sold and higher feed, plant production and transportation costs. Also, the income from affiliates for the first quarter of 2022 includes Seaboard’s portion of a gain on the sale of a business. Management is unable to predict market prices for turkey products or the cost of feed for future periods; however, management anticipates this segment will be profitable for the remainder of 2022”.