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SEABOARD CORP /DE/ (SEB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 showed modest top-line growth and a swing back to positive operating income: Net sales rose 5.7% YoY to $2.316B, operating income improved to $38M from a $(20)M loss, and EPS increased to $32.95 from $22.66 .
  • Mix was the key driver: Marine delivered 21% revenue growth with 12% higher cargo volumes and 8% higher freight rates; CT&M benefited from $38M higher mark‑to‑market derivative gains; Liquid Fuels reduced losses on higher production, while Pork posted a loss on weaker margins and higher legal costs .
  • Management highlighted tariff risks (including China’s retaliatory tariffs on U.S. pork) and guided to Liquid Fuels being near break‑even for the rest of 2025, with ~1 month of scheduled RD plant downtime in Q2; Marine does not expect material impact from USTR fees due to exemptions .
  • Post‑quarter catalysts: Seaboard authorized a share repurchase program up to $100M through 2027 and expects five additional Marine vessels to be delivered during the remainder of 2025, supporting capacity and earnings durability .

What Went Well and What Went Wrong

What Went Well

  • Marine outperformed on both price and volume: “12% increase in cargo volumes and an 8% increase in average freight rates,” lifting segment sales by $71M and operating income by $42M YoY .
  • CT&M margin capture and hedging: Operating income up $23M YoY “primarily due to an increase of $38 million in mark‑to‑market gains on derivative contracts,” despite lower average sales prices .
  • Liquid Fuels operational normalization: “Consistent production at the renewable diesel plant” vs no operations in Q1’24; operating loss improved by $23M YoY, aided by higher fuel volumes and more environmental credits sold (volume +$25M, price −$11M) .

What Went Wrong

  • Pork segment loss: Operating income fell $32M YoY to $(31)M on lower margins and higher legal claims; absence of prior‑year $39M inventory reserve benefit offset lower feed costs ($57M) .
  • Macro/FX/Investments drag below the line: Other investment loss was $(10)M and foreign currency losses were $(9)M, dampening otherwise improved operating performance .
  • Working capital drag on cash flow: Cash from operations was $(20)M vs $19M prior year, driven by CT&M inventory timing and associated receivables/payables swings .

Financial Results

Sequential trend (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$2,218 $2,482 $2,316
Operating Income ($USD Millions)$32 $114 $38
Net Earnings Attributable to Seaboard ($USD Millions)$(149) $154 $32
EPS ($USD)$(153.44) $158.58 $32.95

YoY comparison

MetricQ1 2024Q1 2025
Net Sales ($USD Millions)$2,191 $2,316
Operating Income ($USD Millions)$(20) $38
Net Earnings Attributable to Seaboard ($USD Millions)$22 $32
EPS ($USD)$22.66 $32.95
Gross Margin (%)4.0% (=$87M/$2,191M) 6.1% (=$142M/$2,316M)
Operating Margin (%)(0.9)% (=$(20)M/$2,191M) 1.6% (=$38M/$2,316M)

Segment breakdown (net sales and operating income)

SegmentQ1 2024 Net Sales ($M)Q1 2025 Net Sales ($M)Q1 2024 Op Inc ($M)Q1 2025 Op Inc ($M)
Pork499 486 1 (31)
CT&M1,190 1,225 18 41
Marine332 403 15 57
Liquid Fuels87 121 (49) (26)
Power48 53 7 7
All Other35 28 n/an/a
Corporate——(12) (10)
Total2,191 2,316 (20) 38

KPIs and operational items

KPIQ1 2024Q1 2025Commentary
Marine cargo volume—+12% YoY Higher refrigerated mix supported rates (+8% YoY)
Marine freight rates—+8% YoY Rate mix improved with more refrigerated cargo
Liquid Fuels productionNo operations (repairs/maintenance) Consistent production Q2’25 ~1 month scheduled downtime
Environmental credits$19M blender’s credit in sales No blender’s credit; credits volume +$25M, price −$11M IRA shifted to production tax credit booked in COGS
Butterball net sales$370M $375M Net income fell to ~$0 from $15M on 9% higher costs
Cash from operations$19M $(20)M CT&M working capital timing swings

Guidance Changes

Metric/TopicPeriodPrevious GuidanceCurrent UpdateChange
Liquid Fuels productionQ2 2025n/aScheduled maintenance; “anticipates no production for approximately one month” New update
Liquid Fuels profitabilityRemainder 2025n/a“Management anticipates this segment will be near break‑even” New directional guide
Pork profitability riskRemainder 2025n/a“Management is uncertain whether the Pork segment will be profitable” New risk emphasis
Marine – USTR fees2025+n/a“Believes… no material adverse impact… due to capacity‑based exemptions” New regulatory view
2025 Capex (remaining year)2025n/a~$451M, incl. Marine vessel installments; five vessels remaining for 2025 delivery New budget disclosure
DividendOngoing$2.25/qtr$2.25/qtr declared for Q1; policy unchanged Maintained

Earnings Call Themes & Trends

Note: No company earnings call transcript was provided; thematic analysis reflects 10‑Q MD&A and filings.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Taxes/valuation allowanceSignificant $176M DTA allowance impacted 3Q24 results Not highlighted in PR No incremental update in 10‑Q Lapped one‑time effect
Liquid Fuels operations——Consistent production; near break‑even outlook; Q2 downtime ~1 month Improving operations with planned outage
Marine pricing/volumes——Volumes +12% YoY; rates +8% YoY; higher refrigerated mix Strengthening demand/mix
Tariffs/macro——Tariff volatility; China retaliation on U.S. pork; USTR vessel fee exemptions for SEB Elevated policy risk, manageable for Marine

Management Commentary

  • “In April 2025, in response to U.S.-issued trade tariffs, China issued a series of escalating retaliatory tariffs on U.S. products, including pork… management is uncertain whether the Pork segment will be profitable for the remainder of 2025.”
  • “Management anticipates [Liquid Fuels] will be near break-even for the remainder of 2025… renewable diesel plant is expected to undergo… maintenance in the second quarter of 2025 and anticipates no production for approximately one month.”
  • “Due to certain fee exemptions, including an exemption based on vessel capacity, management believes the [USTR Notice of Action] will not have any material adverse impact on the Marine segment’s results.”
  • Liquidity posture: “As of March 29, 2025, Seaboard had cash and short-term investments of nearly $1.1 billion and total net working capital of $1 billion.”

Q&A Highlights

  • Seaboard did not provide Q&A commentary; all updates and clarifications are contained in the Q1 2025 Form 10‑Q MD&A and notes .

Estimates Context

  • S&P Global consensus for Q1 2025 was not available for EPS or revenue; results are compared to prior periods only. Values retrieved from S&P Global.*
MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD)n/a*$2,316M
EPS ($USD)n/a*$32.95

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Marine momentum looks durable on higher volumes, improving mix, and new vessel deliveries slated through 2025, supporting continued margin and earnings strength .
  • CT&M is benefiting from active risk management (derivative gains) but remains exposed to commodity price volatility; strong liquidity and lines provide flexibility to manage working capital swings .
  • Pork remains the primary risk: tariff exposure (China), margin variability, and legal expense sensitivity could pressure segment profitability in 2025 despite lower feed costs .
  • Liquid Fuels is on a better trajectory post‑maintenance normalization; management targets near break‑even for 2025, but credits/prices and feedstock costs remain key variables; expect a temporary production gap in Q2 .
  • Balance sheet remains a strategic asset with ~$1.1B cash and short‑term investments and $827M of undrawn capacity, supporting capex, vessel program, and opportunistic buybacks ($100M authorization) .
  • Dividend maintained at $2.25/share; capital returns augmented by the new repurchase authorization, providing an incremental support to per‑share metrics and potential downside protection .

Appendix: Additional Items and Sources

  • Q1 2025 earnings press release and 8‑K: net sales $2.316B, operating income $38M, EPS $32.95; dividend $2.25/share .
  • Q1 2025 10‑Q: full financials, segment details, liquidity/capex, market risk, and legal updates .
  • Prior quarters press releases for trend: Q4 2024 net sales $2.482B, EPS $158.58; Q3 2024 net sales $2.218B, EPS $(153.44) and $176M DTA allowance highlighted .
  • Post‑quarter press release: $100M share repurchase program through 2027 .