IBP Announces Drop
In Quarterly Profit

DAKOTA CITY, Neb. —(AP)— IBP Inc., the world's largest producer of fresh beef and pork, said quarterly earnings tumbled nearly 28 percent, partly due to competition from chicken and other meats.

The company reported Friday earnings of $29.1 million, or 31 cents per share, for the quarter ended Sept. 27, down from $40.5 million, or 42 cents per share, a year ago.

The results were lower than Wall Street expectations, and the company's stock slipped 62½ cents to close at $24.12 on the New York Stock Exchange.

Spokesman Gary Mickelson said the company did not know the impact on quarterly profits of the summer's E. coli bacteria scare. He said beef and pork supplies were up throughout the industry, which reduced prices. Competition from chicken and other meats also hurt earnings, as did the costs of opening a processing plant in Canada and a cooked meats plant in South Carolina, he said.

Sales were $3.4 billion in the third quarter, compared with $3.2 billion a year ago.

In late August, the Hudson Foods Inc. plant in Columbus, Neb., shut down after recalling 25 million pounds of ground beef suspected of being tainted with the E. coli bacteria. IBP has since purchased the Columbus plant.

South Korea returned 18 tons of beef it bought from IBP after reporting in late September that E. coli bacteria was found on the outside of the meat.

Earlier in September, the company announced plans to install steam cabinets at each of its 16 plants in North America to reduce the risk of bacterial contamination, including E. coli.

For the first nine months of the year, IBP's earnings were $95.3 million, or $1.01 per share, down from $180.5 million, or $1.87 per share a year earlier. Sales were nearly $10 billion, up from $9.5 billion.