US: Pilgrim's Pride reports record full-year sales
Pilgrim's Pride Corp. has reported a strong turnaround for its full year as rising prices and an improved product mix drove sales to record levels.
The US chicken company reported net income of US$47m on record sales of $7.6bn. Included in these results were charges of $26.5m, related to the early extinguishment of debt incurred by the company in connection with the financing for the Gold Kist acquisition and with the calling of some bonds in September. In fiscal 2006, Pilgrim's Pride reported a net loss of $34.2m, on sales of $5.24 billion.
For the fourth quarter, the world's largest chicken company said net income reached $33.2m on sales of $2.2bn. For the fourth quarter of fiscal 2006, the company reported a net loss of $7.5m, on total sales of $1.34 billion.
"Industry fundamentals remained solid in the fourth quarter as strong export demand and low cold-storage inventories helped sustain positive market pricing trends," said O.B. Goolsby Jr., Pilgrim's Pride president and CEO. "Our improved profitability compared to the prior-year period resulted from higher market pricing for chicken products and an improved product mix as we succeeded in upgrading some of our commodity-type meat into higher-margin, value-added products.
He added: "Our consumer retail segment continued to post good growth as a result of increased penetration of supermarket meat and deli cases and our growing role as a category management partner."
Despite favourable industry fundamentals and the year-over-year improvement in profitability, Goolsby acknowledged that the company's earnings for the fourth quarter were below its own expectations. He said operational inefficiencies and higher fuel costs resulted in higher production and freight costs during the quarter.
"Automation will be a key focus of our capital investment program in fiscal 2008. We believe this investment, which includes labour-reducing technology, will enable us to move more products through our plants efficiently and help alleviate some of the recent issues related to a tight labor market and higher input costs."
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