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Meat products company, Pilgrim’s Pride Corporation (PPC - Snapshot Report) reported impressive fourth-quarter 2013 results. Earnings per share in the quarter were 55 cents, reflecting a marked improvement over 9 cents earned in the year-ago quarter. The bottom-line result also surpassed the Zacks Consensus Estimate of 50 cents by 10%.

For 2013, Pilgrim’s Pride recorded earnings per share of $2.12, up from 70 cents in 2012 and above the Zacks Consensus Estimate of 2.08.

Revenue

Revenues generated in the fourth quarter were $2,047.3 million, down 6.9% year over year and also below the Zacks Consensus Estimate of $2,066 million.

Poor performance was recorded both in the United States and in Mexico. Revenues derived from operations in the United States fell 5.2% year over year to $1,837.2 million and revenues from Mexico were down by 16.8% to $210.1 million.

In 2013, Pilgrim’s Pride generated revenues of $8,411.1 million, up 3.6% year over year but below the Zacks Consensus Estimate of $8,430 million.

Costs/Margins

Cost of revenue in fourth-quarter 2013 went down 13.0% year over year and represented 89.8% of total revenue, down from 96.6% in the year-ago quarter. Gross margin in the quarter expanded 680 basis points to 10.2%. Selling, general and administrative expenses, as a percentage of total revenue, were at 2.4%, up 30 basis points year over year.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter were $197.2 million, up from $67.4 million in the year-ago quarter.

Balance Sheet/Cash Flow

Exiting fourth-quarter 2013, Pilgrim’s Pride’s cash and cash equivalents were $508.2 million versus $330.3 million recorded in the preceding quarter. Long-term debt, net of current maturities, was $502.0 million, way below $912.0 million at the end of the previous quarter.

In 2013, Pilgrim’s Pride generated $878.5 million in cash flow from operating activities versus $199.6 million in 2012. Capital spent on acquisitions of properties, plants and equipments increased 28.7% to $116.2 million.

Pilgrim’s Pride currently carries a Zacks Rank #3 (Hold). Some better-ranked companies in the industry include Tyson Foods, Inc. (TSN - Analyst Report), The Hillshire Brands Co. (HSH - Snapshot Report) and Diamond Foods, Inc. (DMND - Analyst Report). While Tyson Foods carries a Zacks Rank #1 (Strong Buy), both The Hillshire Brands and Diamond Foods hold a Zacks Rank #2 (Buy).

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