last quarter ppc show earning per share of 0.17 market expectation for Q4 is -0.11 my esitmation that ppc will show earning per share of 0.22 to 0.3 due to the feed cost ppc will safe 33 millions $ due to the lower average cost of soya and corn and the chicken price average are slightly higher from 0.9513 per pound to average of 0.9674 in Q4 the earning result will be out on 19 february . see you above 10$ per share on 20 february we are one of the largest producer in Middle East and we already own large position in the company ..... Middle east Market is very strong and PPC make big dollars we are very bullish and we might see 18$ by year end as conservative target strong strong buy
Sentiment: Strong Buy
PPC up after hours and pre market, but have to say I’m disappointed with the small pre-tax Q4 profit. Hopefully management can articulate why they did not do better. Hopefully a greater realization of current market for Q1 2013, lower feed costs per lb. Went back to TSN’s Q2 cc and think they had bought a bunch more cheaper grain than PPC. Anyways … we will see. Still looking for a fantastic back half.
Q4 Rev, CGS, NI and EPS guess
PPC (in millions, except EPS and prices)
… … Q4 2012 EST … Q3 2012
Volume (chicken lbs sold) … 2,068 … 1,920 (guess)
Sales … 2,261 … 2,068
Cost of sales … 2,127 … 1,962
GP … 134 … 106
Net Income … 68 … 43
EPS … 0.26 … 0.17
GA dock, cents / lb … 96.71 … 95.13
USDA Broilers, 12 City, cents/lb … 92.10 … 82.00
Avg. corn / bu. … 7.38 … 7.75
Avg. SBM / ton … 459.48 … 512.33
Ok … again a fairly bold guess, considering analysts are at 8 cent loss for Q4 EPS on sales of $1.9B.
Revenue should be up from Q3. First of all, I believe this Q has 14 weeks instead of 13 weeks. Also, GA dock price is up a penny plus from last Q. And look at the USDA 12 City avg. (from livestock, poultry and dairy outlook for January 2013), it’s up ten cents from last Q3. If PPC’s revenues reflect gains in this USDA 12 city average, even a little, then we could see an even higher revenue and EPS. However, PPC’s amount realized per lb. follows closer with GA dock.
Cost of sales will be up. Even as market prices for grains dropped in Q4, PPC likely has higher priced feed in those birds on hand at the end of Q3 and sold in Q4. Also, higher priced grain on hand at the end of Q3 worked through CGS in Q4. Any feed on hand will be written down to the market close on 12/31/2012 as prices dropped to their lowest point of the Q. IMO feed cost will be higher, on a per pound basis, in Q4 compared to Q3 (Guessing a half penny per lb. of chicken sold)
Admin and other cost will be up, mostly due to the extra week in Q4
Having trouble getting the Q1 2013 EPS down to a “reasonable” level. Will wait until mid Feb to see what happens with chicken and grain prices.
Minus 6 cents EPS on $1.95 b revenue say the "analysts".
1) Revenue - How will revenues be flat compared to Q3 when we have an extra 14th week in the Q and with chicken prices rising from the first day of the Q to the last? SAFM guided with lower volume in their Q1 to end in Jan 2013, but still, I don’t see volumes down that much that revenue won’t be up over $2b.
2) EPS – How will EPS be negative? … when:
a. they made money in Q3 and now chicken prices are up in and feed costs were lower for Q4
b. Tyson reports a chicken segment margin of 3.6%, (and adjusted 4.3% if their China operations are not included) for the same period as PPC’s Q4. TSN’s margin is AFTER admin costs but before interest exp., other and taxes. Apply that margin to PPC and you get over 20 cents EPS. Also, TSN stated their Mexico operations were profitable … and who else is expanding in Mexico?
c. PPC was aggressive buying 10% of their corn (maybe more) from South America at prices discounted to U.S. corn.
Contacted Tyson investment relations and asked about formula based sales contract pricing. They say their formulas factor in rising grain prices and rising chicken prices; however they would not provide the weighting of the two. I am guessing PPC is doing much the same judging by their avg. sales prices compared to market prices. I am guessing that SAFM has less weighting towards rising grain costs as their margins seem to be more highly correlated to the market price for chicken.
So I’m sticking with my 26 cents, others here seem comfortable in the 20 cent range. What are we missing? What do the “analysts” know that we don’t? And analysts had been at 66 cents EPS for 2013 and are now at a more reasonable 84 cents. But contract pricing should keep improving as renewing contracts incorporate more of these commodity price rises. And feed prices should go down next fall, and if there is another drought, I don’t think they go up much from these levels. I don’t like the YOY increase in egg sets, but demand for chicken seems to be strong. And … if the consumer can’t afford beef in August when cattle get really short, what will they eat for protein? Beans? I feel a bit crazy .. cause I got these huge numbers bouncing around in my head that are kind of blowing my mind. Maybe this Q4 call will bring me back to earth … but hoping not.
PPC indicated in their last conference call that they were profitable in October. They did however caution that higher priced grain will work its way through the CGS in Q4. In addition we had a dip in grain prices at YE which will require a write down of all feed inventories to market. But chicken prices have been so strong in November and December; I don’t think this write down is enough to pull PPC’s Q4 EPS below 20 cents. All this write down will do is clear PPC for EPS take off in 2013. I think this Q will show how little analysts know about the stocks they cover. Management says flat to lower and analysts estimate flat to lower and don’t do any more analysis until after Q4.
BILL LOVETTE: And one last thing I would remind you of that I think is related to your — the reason for you asking the question is, I mean, it’s late October, and, you know, we’ve been buying corn and soybean meal in the chickens that we’re now selling during the high prices related to the drought, and, as we’ve said, we remained profitable in October. So I think that the real message in there is we’ve been able to effectively deal with higher corn and soy prices and remain at a profitable level. And, again, I think that’s a testament to the strategy that we have executed, the ownership and accountability that our management team has taken, and we’ll continue to operate in a way that, you know, just because corn is $8 or whatever, the price doesn’t necessarily preclude us from being profitable.
CREW: & LURKERS: I just Heard SOME "INTERESTING NEWS".....The Price for Poultry Has Held up Well in December 2012..... Thus far Profit Margins as REPORTED ARE Not Just Good.....COMPARED TO LAST DECEMBER & November 2011 THEY ARE FANTASTIC..... PPC should have Made $$$ Almost Every Week!!!!.....Remember; From Election Day Nov. 2012....on.... We had SMART MONEY Selling Shares & Taking LONG EARNED PROFITS!!!.... As of Today We are Near a 52 WEEK HIGH.....As GAVGAVMD... Says... Those Losses from 2008 till 20010.... Are WORTH MORE NOW....As Tax rates increase......... THEY WILL HELP EARNINGS!!!! Wildman.
Sentiment: Strong Buy
Hey dahertrust! I’m right there with you in the 20 cent range for Q4. And forget about 66 cents for 2013, we could see $1.20 and potentially significantly more. These chicken producers have hit the sweet spot; GA Dock whole birds are at 98.5 cent, which I believe is a historic high. Corn and SBM prices are on the decline. Protein availability including beef and hogs should be lower in 2013, which should support all meat prices, including chicken. Feed costs will definitely be up in 2013, but chicken prices will likely be disproportionately higher.
Check out the USDA Weekly National Whole Broiler/Fryer Report, compare the graph in that report with recent grain charts and you start to see a pretty spectacular story.
And, as a bonus, there is a valuation allowance on PPC’s deferred tax benefits, which will allow PPC to report very low tax expense.
Might be time to get really greedy with purchases of these producers, cause this scenario could be really special for chicken producers.
not a pump and dumper ... just a pumper
USDA Weekly National Whole Broiler/Fryer Report (Fri) Friday, January 04, 2013
Agricultural Marketing Service
Poultry Market News & Analysis
.............. Wtd Avg ........Change
This Week:....... 104.98...... 2.92 higher
Last Week:...... 102.06
Last Year: ...... 81.61...... 23.37 higher