Pilgrim's Beats on Q3 Earnings, Misses Revs
Food products company, Pilgrim’s Pride Corporation (PPC) reported strong results for the third quarter of 2013. Earnings per share was recorded at 62 cents, an impressive rise of 264.7% from the year-ago quarter. This was driven by an increase in both revenues and margins.
The results also surpassed the Zacks Consensus Estimate of 61 cents by a penny.
Revenues: In the reported quarter, net sales inched up 3.6% year over year to $2.14 billion, as a result of higher exports and a strong customer base. However, revenues missed the Zacks Consensus Estimate of $2.20 billion by 2.6%.
Segment-wise, sales in the U.S. surged 4.4% to $1.9 billion compared with the prior-year quarter. Sales in Mexico fell 3.4% year over year to $210.2 million in the quarter.
Costs/Margins: Gross profit for the reported quarter increased 122.9% year over year to $236.6 million. Adjusted earnings before interest, taxes, depreciation and amortization (:EBITDA) in the third quarter escalated 114.1% to $226.1 million compared with $105.6 million in the year-ago quarter. The improvements in profits are a result of the company’s endeavors to curb expenses.
Balance Sheet: Exiting the third quarter, Pilgrim’s Pride’s cash and cash equivalents were approximately $330.3 million compared with $78.2 million at the end of the previous quarter. Long-term debt (net of current portion) was recorded at $912.0 million in the reported quarter, almost flat compared with quarter ended Jun 30, 2013.
Cash Flow: In the nine months ended Sep 29, 2013,the company recorded cash flow from operations of $596.7 million against $156.0 million in the year-ago period. Capital expenditures in the nine months increased to $76.3 million from $62.1 million in the year-ago comparable period.
Outlook: Management expects to reach higher operational efficiencies in the coming quarters and into 2014. Also, the company will undertake to reach its expected growth in value-added export sales, by 30%, in the near term, which has been attained year-to-date.
The stock currently carries a Zacks Rank #3 (Hold). Other stocks worth considering in the food products industry are Diamond Foods, Inc. (DMND), Inventure Foods, Inc. (SNAK) and Pinnacle Foods Inc. (PF). All these stocks carry a Zacks Rank #2 (Buy).
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