December 26, 2012

Pilgrim's Pride's 2012 fiscal sales are expected to rise from four extra days of productions in fourth quarter of the year.

According to an analyst of Stephens Inc. Farha Aslam, Pilgrim's Pride's 2012 fiscal sale is expected to be US$8.02 billion, up from her earlier estimate of US$7.87 billion. She revised her 2013 revenue estimate down slightly, to US$8.15 billion, from a prior forecast of US$8.16 billion.

Pilgrim's is benefiting from improved execution in domestic chicken, strong exports and strong Mexican profitability, said Aslam, who rates the stock overweight.

Operating profit in Pilgrim's US business was slightly positive in October, roughly break-even in November and likely turned negative in December, Aslam forecast, but profitability in Mexico should remain robust.

She said tight cold storage inventories and retail feature activity should push up breast meat prices after Christmas, while strong demand from Mexico will continue to support leg quarters.

Aslam expects steady exports in fiscal 2013, with new growth markets including Sub-Saharan Africa and the Middle East.