March 25 (Reuters) - Smithfield Foods ( SFD ) said on

Tuesday that cautious consumer spending and higher raw materials

costs are limiting profit in its packaged meats business, as the

top U.S. pork processor reported its first quarterly results

since going public in January.

The Virginia-based company has focused on selling pork, ham

and sausages under brands including Smithfield, Eckrich and

Nathan's Famous because its packaged meats business can

earn higher margins than a unit that produces hogs.

But increasing materials costs and a later date for the

Easter holiday, when many consumers eat ham, are dampening

profitability in the first quarter of 2025, Chief Financial

Officer Mark Hall told analysts on a call.

Smithfield projected adjusted operating profit for packaged

meats at $1.05 billion to $1.15 billion this fiscal year,

compared with about $1.1 billion in 2024.

"We are providing a range of estimates that really takes in

to account higher input prices and a cautious consumer spending

environment," said Steve France, the unit's president.

Smithfield said total sales fell 1.2% to $3.95 billion in

the quarter ended Dec. 29, and profit per share was 54 cents,

compared with a loss of 25 cents a year earlier.

Shares were down 0.9% at $19.43 at midday.

Packaged meat sales rose 2.2% in the quarter, compared with

a year earlier, and accounted for 59% of total sales last year.

Average prices for Smithfield's packaged meats last year

rose 3.1%, offsetting a 2.5% decline in sales volumes, Hall

said. Bacon sales suffered from laws in California and

Massachusetts that ban the sale of pork from pigs kept in

tightly confined spaces, he added.

Smithfield's hog production business is benefiting from

higher hog prices and lower feed costs, CEO Shane Smith said.

The company has shifted toward buying more of the hogs it

processes, rather than owning them while they are being raised,

to lessen its exposure to volatile commodity markets. It expects

to produce 11.5 million hogs in 2025, down 35% from 2019, and is

targeting a drop to 10 million hogs over the medium term,

executives said.

Regarding tariff disputes under U.S. President Donald Trump,

the company said its fresh pork business is seeing "fairly

minimal" disruptions.