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Pilgrim's Reports Much Improved Quarterly Results

by 5m Editor
5 February 2010, at 6:16a.m.

US - Pilgrim's Pride Corporation has reported net income of $33.6 million, or $0.44 per diluted share, on net sales of $1.6 billion for the quarter ended 27 December 2009.

These results include an income tax benefit of $102.4 million, or $1.33 per diluted share, related to a net operating loss carry-forward, and a net charge of $32.7 million, or $0.42 per diluted share, related to the company's reorganisation. For the comparable quarter a year earlier, the company reported a net loss of $228.8 million, or $3.09 per diluted share, on total sales of nearly $1.9 billion.

Dr Don Jackson, Pilgrim's Pride president and chief executive officer, commented: "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.

"While we are pleased with the progress we have made, we recognise 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 products during the quarter was mixed. The average market price for breast meat rose eight per cent and for wings increased by 37 per cent versus the same period a year earlier. The average market price for leg quarters, however, declined 10 per cent and Georgia Dock dropped about five per cent. Pilgrim's Pride said its total US feed ingredient costs in the quarter declined approximately $120 million, or 20 per cent, when compared to the same period a year ago."

The company reported an overall operating profit of $7.6 million for the quarter, an improvement of $185.8 million from a year earlier. Operating income was driven by higher gross profit and a $16 million reduction – or nearly 17 per cent 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 reorganisation.

Dr Jackson added: "Today. our business strategy is clear. 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."

On 28 December 2009, Pilgrim's Pride amended and restated its bylaws, which, among other things, changed the company's fiscal year end from the Saturday nearest September 30 of each year to the last Sunday in December of each year. This change aligns the company's reporting cycle with the fiscal calendar of JBS USA, the majority stockholder of Pilgrim's Pride. The change resulted in an approximate three-month transition period which began September 27, 2009, and ended 27 December 2009.