Seaboard Q3 Operating Income Falls to $13 Million on Pork Loss

Seaboard Corporation (SEB ) reported on November 3, 2026 that net sales for the three months ended October 3, 2026 rose to US$2.77 billion from US$2.54 billion in the corresponding 2025 quarter, while operating income fell to $13 million from $84 million. A Pork operating loss outweighed improvements in Liquid Fuels, Commodity Trading and Milling, and Marine. Net earnings attributable to Seaboard dropped to $28 million, or $29.23 per share, from $109 million, or $113.71 per share.

The board also declared a quarterly cash dividend of $2.25 per share of common stock, payable on November 23, 2026 to stockholders of record at the close of business on November 13, 2026.

Pork Drives the Operating Decline

The quarterly report attributes the $71 million consolidated operating-income decline primarily to a $138 million deterioration in Pork, partly offset by a $52 million improvement in Liquid Fuels. Because the Pork reversal was larger than the total decline, gains elsewhere absorbed much of the segment’s weakness.

The segment results for the three months ended October 3, 2026 and September 27, 2025 show how widely performance diverged. Amounts are in millions of U.S. dollars.

Lower pork-product market prices reduced Pork sales by $49 million, lower volumes reduced them by $8 million, and lower market-hog sale prices accounted for another $16 million decline. The operating deterioration primarily reflected lower sales prices, higher overall hog production costs and a $51 million lower-of-cost-and-net-realizable-value inventory adjustment. That adjustment followed lower forecast pork prices and higher forecast production costs, including feed.

Management anticipates that Pork will not be profitable for the remainder of 2026 and cautions that market prices, production and third-party hog costs, disease and geopolitical events are difficult to predict.

Other Segments Provide a Partial Offset

In Liquid Fuels, higher fuel sales contributed $68 million to the increase in net sales and higher environmental-credit sales contributed $66 million. Feedstock costs increased 31%, while income from production tax credits rose $5 million. The renewable diesel plant was shut for scheduled maintenance during the final week of the quarter; management expects operations to resume in November 2026 and anticipates that the segment will be profitable for the remainder of 2026.

Commodity Trading and Milling’s operating improvement primarily reflected a $15 million increase in mark-to-market gains on commodity derivative contracts. Marine’s sales growth came from a 9% increase in cargo volumes and a 4% increase in average freight rates, while vessel fuel costs increased $12 million.

Power moved in the opposite direction after the EDM III generating barge was nonoperational for most of the quarter. Turbine damage was identified during a routine inspection in mid-July 2026. Management does not expect the repairs to be complete until the end of 2026 and anticipates no segment profit for the remainder of the year.

Income from the Turkey affiliate also fell, to $9 million from $26 million, primarily because of a legal settlement at Butterball. The pressure therefore extended beyond operating income: earnings before income taxes declined to $37 million from $125 million even as other income increased to $35 million from $23 million.

Nine-Month Earnings Improve as Cash Flow Weakens

For the nine months ended October 3, 2026, net sales increased to $8.09 billion from $7.34 billion in the corresponding 2025 period. Operating income rose to $209 million from $174 million, and net earnings attributable to Seaboard increased to $300 million, or $313.22 per share, from $243 million, or $251.47 per share.

The nine-month operating improvement was driven primarily by a $194 million increase in Liquid Fuels operating income, partly offset by a $111 million decrease in Pork. Those figures show how much of the year’s broader improvement came from Liquid Fuels, notwithstanding the segment’s scheduled third-quarter maintenance.

Cash generation moved in the opposite direction. Operating cash flow declined to $236 million from $380 million, primarily because cash used for working capital increased $172 million, partly offset by a $79 million increase in dividends received from affiliates. Higher inventory use was principally tied to the timing of sales and purchases in Commodity Trading and Milling.

Capital expenditures were $299 million, including $119 million in Power primarily for installment payments on the EDM IV barge under construction. That spending exceeded operating cash flow by $63 million, calculated from the reported figures, and management has budgeted approximately $145 million of additional capital expenditures for the remainder of 2026.

As of October 3, 2026, Seaboard had nearly $1.5 billion of cash and short-term investments and $743 million of available borrowing capacity, with $711 million drawn against its lines of credit.

The central issue for the remainder of 2026 is whether gains in Liquid Fuels, trading and shipping can continue to offset Pork’s losses and Power’s repair-related weakness while capital spending exceeds operating cash generation. The nine-month results show improvement, but the third quarter demonstrates how vulnerable that progress remains to commodity prices and production costs.