February 20, 2012

As high feed costs continued to weigh down revenue, Pilgrim's Pride Corp. (PPC) swung to a fourth-quarter loss, its fourth consecutive period in the red.

The world's second-largest poultry processor has been hit by a withering combination of historically high costs for corn and persistently low wholesale prices for chicken meat amid a glut in supplies. Other processors have suffered as well with a handful filing for bankruptcy over the past year. Pilgrim's itself emerged from bankruptcy protection at the end of 2009.

The industry's downturn is the latest in a perpetual boom-and-bust cycle that has, over many years, forced processors to consolidate or shut down.

Chief Executive Bill Lovette on Friday (Feb 17) described 2011 as an "extremely challenging year," but said the company's strategy and management structure realignment will help it in the future.

Pilgrim's Pride reported a loss of US$85.4 million, or US$0.40 a share, compared with a year-earlier profit of US$41.8 million, or US$0.20 a share. Sales were up 1% to US$1.83 billion.

Analysts polled by Thomson Reuters had most recently forecast a loss of US$0.29 on revenue of US$1.88 billion. Gross margin narrowed to 1.1% from 6.6% as cost of sales jumped 6.9%. Shares closed at US$5.52 Thursday and were inactive premarket. The stock is up 8.2% over the past three months.