US: Pilgrim's Pride continues profit streak
Pilgrim's Pride has undergone a restructuring programme
US poultry producer Pilgrim's Pride has reported its third consecutive quarterly profit, with the bottom line boosted by restructuring initiatives.
The company said its earnings rose to US$42.9m in the July-to-September quarter, up from a loss of $162.5m in the comparable period of last year. Third-quarter sales rose 9.4% to $2.07bn, the company revealed.
The group, which Brazil-based JBS brought from bankruptcy in 2009, has undergone a restructuring programme that has seen it lower its cost base, revamp staff intensives and look to build an export presence. In August, Pilgrim's sold its commercial-egg operations to Cal-Maine Foods.
Commenting on the result, BMO Capital Markets analysts said they were encouraged by the strides that Pilgrim's Pride has made to improve the business fundamentals.
"Unquestionably, Pilgrims Pride has made tremendous strides in becoming a better operator in terms of 1) cost structure; 2) shift toward market-based contracts; 3) better analytics to focus on profits across the whole bird; 4) an extensive export program; and 5) sourcing of corn from South America," BMO said in an investor note.
However, the company could potentially be hit by volatility in US chicken prices, the analysts warned.
"We remain on the sidelines given our view on the US chicken recovery and the volatility associated with its Mexico profits," they added.
US egg firm Cal-Maine Foods has recorded an increase in third-quarter profit but said feed costs hit margins....
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