CHICAGO – Pilgrim's Pride Corp. (PPC), the No. 2 U.S. chicken producer, Monday posted quarterly earnings that beat analyst estimates and raised its profit forecast for the rest of the year, lifted by strength in Mexico and lower feed costs.
Earnings for the fiscal third quarter ended July 2 were six cents per share higher than the raised forecast Pilgrim's Pride made just two weeks ago and the company's shares rose as much as 5 percent in early trading.
Prices for corn and soymeal, key feed ingredients, are down from a year ago, livestock analysts have said, adding that feed accounts for 25 percent to 35 percent of the cost of goods sold for chicken companies.
Net income for the quarter rose to $85.4 million, or $1.28 per share, from $9.8 million, or 15 cents per share, a year earlier. The company took $39.6 million, or 60 cents a share, in charges in the year-earlier quarter to restructure its turkey business and for other related items.
Analysts on average expected earnings of $1.20 per share, according to Reuters Estimates.
Sales dipped to $1.44 billion from $1.45 billion.
The Pittsburg, Texas-based company raised its fourth-quarter profit forecast to a range of 90 cents to $1 a share from its prior forecast of 73 cents to 91 cents a share. Analysts on average had forecast 91 cents a share, according to Reuters Estimates.
But some thought the company may even do better.
"We believe the new guidance is conservative and we are maintaining our $1.11 estimate for (the fourth quarter) in light of recently stabilizing feed costs," Pablo Zuanic, analyst at J.P. Morgan Securities, said in a research note.
Pilgrim's Pride shares were up $1.07 at $37.92 Monday on the New York Stock Exchange (search).