Yahoo Finance Pilgrim's Pride (PPC) Q1 Earnings Outperform Estimates
Pilgrim’s Pride Corporation PPC reported first-quarter 2023 results, with both the top line and the bottom line deteriorating from the year-ago quarter’s level. Nevertheless, the company’s earnings surpassed the Zacks Consensus Estimate.
The company’s portfolio diversification strategies, operational excellence and Key Customer partnerships have been driving growth. However, persistent inflation, elevated grain pricing and depressed commodity values were headwinds.
Shares of the company have declined 11% in the past six months compared with the industry’s 12.4% fall. We also note that shares of PPC have jumped more than 3.7% after the trading session on Apr 26. This might be owing to the earnings beat in the quarter under review.
Pilgrim's Pride Corporation Price, Consensus and EPS Surprise
Pilgrim's Pride Corporation price-consensus-eps-surprise-chart | Pilgrim's Pride Corporation Quote
Q1 in Detail
The company reported adjusted earnings of 8 cents a share, which surpassed the Zacks Consensus Estimate of adjusted loss of 1 cent. However, the bottom line deteriorated from earnings of $1.18 per share reported in the year-ago quarter.
The producer, marketer and distributor of fresh, frozen and value-added chicken and pork products generated net sales of $4,165.6 million, which dipped 1.8% from the year-ago quarter’s level. Net sales increased in Europe and Mexico operations.
Net sales in the U.S. operations were $2,432.6 million, down from $2,581.2 million reported in the year-ago quarter. Management highlighted that its commodity business in the United States remained extremely challenging, particularly in January. Although its varied portfolio of products across bird sizes and branded offerings lessened market effects, its performance was improved by its intense focus on operational excellence. Management is on track with investments in expansion at the Athens, GA plant, construction of a protein conversion plant in South Georgia and several automation projects to enhance its portfolio.
Mexico operations generated net sales of $493.8 million in the reported quarter, up from $467.2 million in the prior-year quarter. Pilgrim's Pride’s Mexico business witnessed improved results throughout the quarter, with market conditions improving sequentially. Its operations also recovered from the live challenges.
Net sales from Europe operations rose to $1,239.3 million in the quarter under review from $1,192 million in the prior year. The company’s U.K. and Europe businesses gained from continued focus on driving scale, investments in network optimization and cost synergies across its businesses, which also resulted in consistent growth in adjusted EBITDA during the quarter.
Pilgrim's Pride’s cost of sales increased to $3,992.6 million from $3,698.4 million reported in the year-ago quarter. Gross profit slumped to $173 million from $542 million. Adjusted EBITDA of $151.9 million decreased from $501.8 million reported in the year-ago quarter. Adjusted EBITDA margin of 3.6% contracted from 11.8% reported in the year-ago quarter.
Other Financial Details
This Zacks Rank #4 (Sell) company ended the quarter with cash and cash equivalents of almost $150.7 million, long-term debt (less current maturities) of $3,196.6 million and total shareholders’ equity of $2,906.5 million. The company used $161.7 million of cash from operating activities for year ended Mar 26, 2023.
3 Key Picks
Some better-ranked stocks are Inter Parfums IPAR, General Mills GIS and Kimberly-Clark Corporation KMB.
IPAR has an expected long-term earnings growth rate of 15% and a trailing four-quarter earnings surprise of 36.2%, on average. Inter Parfums currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial year sales and earnings suggests growth of 15.3% and 7.3%, respectively, from the year-ago reported numbers.
General Mills is a major designer, marketer and distributor of premium lifestyle products. It currently carries a Zacks Rank of 2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.1%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year sales and earnings suggests growth of 6.3% and 7.4%, respectively, from the year-ago reported numbers.
Kimberly-Clark is engaged in the manufacture and marketing of a wide range of consumer products around the world. It currently has a Zacks Rank of 2. KMB has a trailing four-quarter earnings surprise of 5.1%, on average.
The Zacks Consensus Estimate for Kimberly-Clark’s current financial year sales and earnings suggests growth of 1.3% and 5.5%, respectively, from the year-ago reported numbers.
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