Pilgrim's Pride Corporation (PPC - Free Report) reported second-quarter 2020 results, with the top and the bottom line declining year over year. Also, earnings missed the Zacks Consensus Estimate. The downside can be attributed to dismal performance in the United States and Mexican operations. Let’s take a closer look.
Q2 in Detail
The company posted breakeven quarterly adjusted earnings in the second quarter. Notably, the metric came in at earnings of 69 cents per share in the year-ago quarter. The Zacks Consensus Estimate was pegged at earnings of 11 cents per share.
In the reported quarter, Pilgrim's Pride generated net sales of $2,824 million, down 0.7% year over year. The downside can be attributed to dismal performance in the United States and Mexico operations.
Revenues in the U.S. operations amounted to $1,798.7 million, down 6.2% year over year. The downside was due to the adverse impact of the coronavirus outbreak. Moreover, large bird deboning category was especially challenged during the quarter.
Mexican operations generated revenues of $268.1 million in the reported quarter, down 31.3% year over year. The downtick was caused by weak macro environment, which impacted the overall demand in the region. A weak peso during the quarter acted as a deterrent. Also, industry-wide prices were below seasonal expectations.
Revenues from European operations surged 41.3% year over year to $757.2 million. The uptick was driven by better operational efficiencies, robust retail demand as well as solid pork exports to china. Also, improvement in SG&A management as well as synergies contributed to the upside. However, lower demand in foodservice acted as a deterrent.
Pilgrim's Pride’s overall cost of sales in the reported quarter increased 9.25% year over year to $2,704.2 million. Moreover, gross profit fell 67.4% year over year to $119.9 million.
Further, adjusted EBITDA was $112.2 million, down 67.9% year over year. Adjusted EBITDA margin of 4% declined 8.3 percentage points on a year-over-year basis.
Other Financial Details
Pilgrim's Pride exited the quarter with cash and cash equivalents of approximately $507.4 million, long-term debt (less current maturities) of $2,616 million and total shareholders’ equity of $2,374.4 million. Further, the company generated $140.7 million as cash from operating activities for six months ended Jun 28, 2020.
Shares of this Zacks Rank #3 (Hold) company have slumped 50.4% year to date compared with the industry’s decline of 13.9%.
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