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Pilgrim’s Pride Corporation (PPC - Snapshot Report), a food products company, reported strong results for the fourth quarter and full fiscal 2012.

Earnings per share were recorded at 9 cents, a tremendous increase of 122.5% from the reported loss of 40 cents in the year-ago quarter. This was driven by an increase in revenue as well as margins. However, the net income includes an income tax benefit related to the settlement of earlier tax returns, along with restructuring expenses. The results also largely surpassed the Zacks Consensus Estimate of a loss of 8 cents, by 212.5%.

For 2012 (ended Dec 30, 2012), the company reported earnings per share of 70 cents, up 131.7% from the year-ago period.

Revenue: In the reported quarter, net sales inched up 19.7% year over year to $2.2 billion, as a result of a rise in chicken prices and improved sales mix. Also, revenue beat the Zacks Consensus Estimate of $1.9 billion by 13.5%.

Segment wise, sales in the US surged by 17.7% to $1.9 billion from $1.6 billion in the prior-year comparable quarter. Mexico grew 37.3% year over year to $252.5 million in the quarter.

Revenue increased 7.8% year over year to $ 8.1 billion in 2012.

Costs/Margins: Gross profit for the quarter increased 274.2% year over year to $75.5 million in the reported quarter. Adjusted EBITDA in the fourth quarter escalated 198.0% to $67.4 million compared with $22.6 million in the year-ago quarter. Due to a tight check on the expenses, SG&A expenses decreased 6.3% year over year to $45.6 million.

Balance Sheet: Exiting the fourth quarter, Pilgrim’s cash and cash equivalents were approximately $68.2 million compared with $55.0 million at the end of the previous quarter. Long-term debt (net of current portion) was recorded at $1.1 billion in the reported quarter.

Cash Flow: Cash flow from operations was recorded at $43.7 million in the fourth quarter 2012; up from $0.5 million in the year-ago period. Capital expenditures in the reported quarter climbed to $28.2 million from $14.1 million in the year-ago quarter.

Outlook: Management anticipates cost reductions of $135.0 million in 2013 from the 2012 levels. Also, it is expected that the company will increase its value-added export sales by 30% in the coming year.

The stock currently bears a Zacks Rank #2 (Buy). Other stocks worth a look in the industry are Hillshire Brands Company (HSH - Snapshot Report) and Smithfield Foods Inc. , both holding a Zacks Rank #1 (Strong Buy), whereas another stock, Hormel Foods Corporation (HRL - Analyst Report), holds a Zacks Rank #2 (Buy).

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