Pilgrim’s Pride reports latest financial results

Pilgrim’s Pride has reported net income of $33.6 mln on net sales of $1.6 bln for the quarter ended December 27, 2009.

These results include an income tax benefit of $102.4 mln related to a net operating loss carryforward, and a net charge of $32.7 mln related to the company’s reorganization. For the comparable quarter a year earlier, the company reported a net loss of $228.8 mln on total sales of nearly $1.9 bln.

“Our financial results have improved dramatically over the past year as we work to create a market-driven company clearly focused on delivering the highest levels of service, selection and value to our customers as efficiently as possible,” said Don Jackson, Pilgrim’s Pride president and CEO. “While we are pleased with the progress we have made, we recognize that there is much more work to be done in positioning Pilgrim’s Pride for sustained, profitable growth. We will continue to focus on opportunities for improving our product mix, expanding our customer base and operating more efficiently.”

Market pricing for chicken

Market pricing for chicken products during the quarter was mixed. The average market price for breast meat rose 8% and for wings increased by 37% versus the same period a year earlier. The average market price for leg quarters, however, declined 10% and Georgia Dock dropped about 5%. Pilgrim’s Pride said its total US feed-ingredient costs in the quarter declined approx. $120 mln, or 20%, when compared to the same period a year ago.

Operating figures

The company reported an overall operating profit of $7.6 mln for the quarter, an improvement of $185.8 mln from a year earlier. Operating income was driven by higher gross profit and a $16 mln reduction – or nearly 17% drop – in Selling, General and Administrative (SG&A) expenses in the company’s US operations as the company continued to benefit from expense reduction efforts during its reorganization.

“Today our business strategy is clear,” said Dr. Jackson. “We are squarely focused on being a market-driven company that produces to the needs of our customers and the market. We have reduced our production of commodity chicken and are targeting higher-margin products. Our core retail and foodservice demand is driving supply. Our supply chain is focused on optimizing production, while our operations group is driving performance through safety, quality, productivity and cost efficiency.”