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Why Is Pilgrim's Pride (PPC) Up 2.4% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Pilgrim's Pride Corporation (PPC - Free Report) . Shares have added about 2.4% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Pilgrim's Pride reported weak fourth-quarter 2016 (ended Dec 25, 2016) results.
The company’s quarterly adjusted earnings of $0.30 per share missed the Zacks Consensus Estimate by 18.9%. However, the bottom line exceeded the year-ago tally of $0.26 per share.
GAAP earnings during the quarter was $0.28 per share, versus the prior-year tally of $0.25 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 is aimed at improving 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one downward revision for the current quarter.
At this time, the Pilgrim's Pride stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Pilgrim's Pride (PPC) Up 2.4% Since the Last Earnings Report?
A month has gone by since the last earnings report for Pilgrim's Pride Corporation (PPC - Free Report) . Shares have added about 2.4% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2016 Results
Pilgrim's Pride reported weak fourth-quarter 2016 (ended Dec 25, 2016) results.
The company’s quarterly adjusted earnings of $0.30 per share missed the Zacks Consensus Estimate by 18.9%. However, the bottom line exceeded the year-ago tally of $0.26 per share.
GAAP earnings during the quarter was $0.28 per share, versus the prior-year tally of $0.25 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 is aimed at improving 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one downward revision for the current quarter.
Pilgrim's Pride Corporation Price and Consensus
Pilgrim's Pride Corporation Price and Consensus | Pilgrim's Pride Corporation Quote
VGM Scores
At this time, the Pilgrim's Pride stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.