Meat processor PILGRIM’s Pride has reported a net loss of US$20.5m, or 31 cents per share, on sales of $1.29bn for the third quarter compared to net earnings for the third quarter of last year of $85.3m, or $1.28 per share, on sales of $1.44bn.
“Despite recent upward trends in pricing for breast meat and leg quarters, our third-quarter results continued to reflect the challenging protein environment seen in the first half of the fiscal year,” said O.B. Goolsby, Jr., Pilgrim’s Pride president and chief executive officer.
“Our net loss for the third quarter of 2006 was largely due to weak pricing caused by the lingering effects of lower export demand and higher inventory levels last winter and in the early spring. We are hopeful that the recent increases in leg quarter and breast meat prices will continue as international demand for US chicken products improves and the full effect of the recently announced industry production cutbacks are realized in the marketplace.”
When compared to the second quarter, for the full third quarter, pricing of quarters and breast meat increased by 118.8% and 36.2% respectively. However, prices were an average of 34.2% and 16.6% lower than the year-ago period.
During the quarter, the company launched a multi-point plan to improve performance, including cuts in production, which had been fully implemented by the end of July, a reduction in capital investment, cost reductions and improved efficiencies.
“We are pleased with the progress we have achieved on our strategic plan. Operating efficiently has never been more important than it is in the current industry environment. We believe the combination of stronger domestic and export selling prices, resumption of demand for our products in the export markets, and improved operating efficiencies should position Pilgrim’s Pride for a return to profitability,” Goolsby said.