August 1, 2007

 

Pilgrim's Pride returns to profitability for Q3, earns US$62 million
 

 

Pilgrim's Pride Corporation , the top chicken company in the US, Tuesday (July 31) reported net income of US$62.6 million, or $0.94 per share, on record sales of US$2.12 billion for the third fiscal quarter ended June 30, 2007.

 

This is compared to a net loss of US$20.5 million, or US$0.31 per share, on total sales of US$1.29 billion the same quarter last year.

 

For the nine months ended June 30, 2007, the Company reported net income of US$13.8 million, on record sales of US$5.45 billion. Included in these results were charges of US$14.5 million, US$9.1 million, related to the early extinguishment of debt incurred by the Company in connection with the financing for the Gold Kist acquisition.

 

O.B. Goolsby Jr., Pilgrim's Pride president and CEO, said he is pleased with the company's performance, given rising feed costs the industry was facing. The company's return to profitability is a direct result of improved pricing driven by production cuts implemented earlier this year, the company said.

 

This was further boosted by strong demand for its products, particularly in the consumer retail segment. Higher selling prices for the company's products enabled it to offset higher corn and soymeal costs, the company said.

 

Pilgrim Pride's Mexico operations also returned to profitability in the third quarter.

 

Goolsby said the company continues to make good progress with the integration of its Gold Kist acquisition. Through the end of the third fiscal quarter, the company had realized US$48 million in annualized cost savings ¨C ahead of the forecasted schedule of US$25 million by the end of September.

 

Goolsby said he is now confident the company would be able to exceed its previously announced synergy savings target of US$100 million and these savings could be close to US$150 million eventually.

 

He also said high feed costs would remain for the long term and would be the biggest challenge for the industry.

 

He noted that despite record corn production, the country's corn industry would still have to plant millions of hectares more to satisfy ethanol demand.

 

This inevitably meant that while consumers would save more on oil, they would have to spend more on food, he said.