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Pilgrim's Pride (PPC) Misses on Q4 Earnings and Revenues
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Premium consumer goods company, Pilgrim's Pride Corporation (PPC - Free Report) reported weak fourth-quarter 2016 (ended Dec 25, 2016) results.
However, over the last one month, shares of this Zacks Rank #2 (Buy) stock recorded a return of 2.57% – outperforming 2.04% return provided by the Zacks categorized Food industry.
Revenues and Earnings
The company’s quarterly adjusted earnings of 30 cents per share missed the Zacks Consensus Estimate by 18.9%. However, the bottom line exceeded the year-ago tally of 26 cents per share.
The company's net income for the fourth quarter was $70.6 million as against $63.1 million in the year-ago quarter.
For full-year 2016, adjusted earnings came in at $1.75 per share versus $2.60 per share recorded in the prior-year period.
Net income for 2016 was $440.5 million, down 31.8% year over year.
Revenues
In the reported quarter, Pilgrim's Pride generated net revenue of $1,908.2 million, down 2.7% year over year. The top line also missed the Zacks Consensus Estimate of $1,933 million.
Revenues from the company's U.S. operations, which account for nearly 83.8% of the total revenue, fell 3.7% year over year. Revenues from the Mexican business – 16.2% of the total revenue – were up 3.9% year over year.
For full-year 2016, revenues came in at $7,931.1 million as against $8,180.1 million recorded in the year-ago period.
Costs/Margins
Pilgrim's Pride's cost of sales dipped 4% year over year to $1,727.7 million. Gross margin expanded 130 basis points (bps) year over year to 9.5%. Selling, general and administrative expenses advanced 4.6% year over year to $55.4 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 14.8% year over year to $172.2 million.
Balance Sheet/Cash Flow
Pilgrim's Pride exited the quarter with cash and cash equivalents of approximately $120.3 million, down from $439.6 million at the end of 2015. Long-term debt (net of current portion) was $1,011.9 million as against $985.5 million as of Dec 27, 2015.
At the end of 2016, the company generated $755.5 million of cash from its operating activities, down 22.7% year over year. Capital spending totaled $272.5 million, up 55% year over year.
Outlook
Pilgrim's Pride intends to boost its commercial performance on the back of its unique portfolio strategy, sound customer relationships and strategic business expansion across different geographical locations. Notably, the company believes that its prepared foods business would be stronger in 2017, with the inclusion of new capacities at the Moorefield facility.
Additionally, the company believes that its capex investment worth $270 million in 2016 would enhance its competitive strength in the market, moving ahead.
Key Picks
Other well-ranked stocks within the industry are listed below:
Blue Buffalo Pet Products, Inc. (BUFF - Free Report) currently carries a Zacks Rank #2 and has a positive average earnings surprise of 10.40% for the trailing four quarters.
Conagra Brands, Inc. (CAG - Free Report) also holds a Zacks Rank #2 and has a positive average earnings surprise of 13.30% for the past four quarters.
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Pilgrim's Pride (PPC) Misses on Q4 Earnings and Revenues
Premium consumer goods company, Pilgrim's Pride Corporation (PPC - Free Report) reported weak fourth-quarter 2016 (ended Dec 25, 2016) results.
However, over the last one month, shares of this Zacks Rank #2 (Buy) stock recorded a return of 2.57% – outperforming 2.04% return provided by the Zacks categorized Food industry.
Revenues and Earnings
The company’s quarterly adjusted earnings of 30 cents per share missed the Zacks Consensus Estimate by 18.9%. However, the bottom line exceeded the year-ago tally of 26 cents per share.
The company's net income for the fourth quarter was $70.6 million as against $63.1 million in the year-ago quarter.
For full-year 2016, adjusted earnings came in at $1.75 per share versus $2.60 per share recorded in the prior-year period.
Net income for 2016 was $440.5 million, down 31.8% year over year.
Revenues
In the reported quarter, Pilgrim's Pride generated net revenue of $1,908.2 million, down 2.7% year over year. The top line also missed the Zacks Consensus Estimate of $1,933 million.
Revenues from the company's U.S. operations, which account for nearly 83.8% of the total revenue, fell 3.7% year over year. Revenues from the Mexican business – 16.2% of the total revenue – were up 3.9% year over year.
For full-year 2016, revenues came in at $7,931.1 million as against $8,180.1 million recorded in the year-ago period.
Costs/Margins
Pilgrim's Pride's cost of sales dipped 4% year over year to $1,727.7 million. Gross margin expanded 130 basis points (bps) year over year to 9.5%. Selling, general and administrative expenses advanced 4.6% year over year to $55.4 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 14.8% year over year to $172.2 million.
Balance Sheet/Cash Flow
Pilgrim's Pride exited the quarter with cash and cash equivalents of approximately $120.3 million, down from $439.6 million at the end of 2015. Long-term debt (net of current portion) was $1,011.9 million as against $985.5 million as of Dec 27, 2015.
At the end of 2016, the company generated $755.5 million of cash from its operating activities, down 22.7% year over year. Capital spending totaled $272.5 million, up 55% year over year.
Outlook
Pilgrim's Pride intends to boost its commercial performance on the back of its unique portfolio strategy, sound customer relationships and strategic business expansion across different geographical locations. Notably, the company believes that its prepared foods business would be stronger in 2017, with the inclusion of new capacities at the Moorefield facility.
Additionally, the company believes that its capex investment worth $270 million in 2016 would enhance its competitive strength in the market, moving ahead.
Key Picks
Other well-ranked stocks within the industry are listed below:
Calavo Growers, Inc. (CVGW - Free Report) has a positive average earnings surprise of 11.81% for the last four quarters and presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Blue Buffalo Pet Products, Inc. (BUFF - Free Report) currently carries a Zacks Rank #2 and has a positive average earnings surprise of 10.40% for the trailing four quarters.
Conagra Brands, Inc. (CAG - Free Report) also holds a Zacks Rank #2 and has a positive average earnings surprise of 13.30% for the past four quarters.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>