It has been about a month since the last earnings report for Pilgrim's Pride (PPC Quick QuotePPC - Free Report) . Shares have added about 15.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Pilgrim's Pride 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 drivers.

Pilgrim's Pride Q4 Earnings Miss Estimates, Rise Y/Y

Pilgrim's Pride reported decent fourth-quarter 2020 results, wherein both the top- and bottom-line increased year over year, courtesy of product portfolio strategy, operational endeavors and Key Customer strategy that helped mitigate the impact of tough market conditions. Undeniably, healthy performance across European and Mexican operations also contributed to the results. However, surprisingly quarterly earnings fell short of analysts’ expectations.

Q4 in Detail

Pilgrim's Pride reported fourth-quarter adjusted earnings of 25 cents a share that increased significantly from 14 cents posted in the year-ago period. However, the quarterly earnings missed the Zacks Consensus Estimate of 34 cents.

This producer, marketer and distributor of fresh, frozen, and value-added chicken and pork products generated net sales of $3,117.8 that increased roughly 1.8% from the year-ago period. While sales improved in Europe and Mexico, the same declined in the United States.

Net sales in the U.S. operations amounted to $1,876.2 million, down 1.5% year over year. The company pointed out that commodity sector continued to remain challenging, however, it is trying to improve operating efficiency in the same. Further, management highlighted that within case-ready and small bird businesses, robust Key Customer demand from QSR and retail customers remained stellar. Moreover, U.S. Prepared Foods business continues to gain traction.

Mexican operations generated net sales of $392.5 million in the reported quarter, up 14.2% year over year. Management notified that normalization in economic activities, balanced supply/demand scenario, increased share of non-commodity products, fewer imported chicken, and operational efficiency favorably impacted Mexican operations. Markedly, demand for Prepared Foods in the region also improved.

Net sales from European operations rose 4.1% year over year to $849.2 million. Effective operational strategies, strong pork exports and robust domestic demand have been contributing to the company’s performance in the region. Management stated that improved operational efficiencies, investments made in automation, focus on higher yields, and better management of input costs will continue to favorably impact the results.

Pilgrim's Pride’s cost of sales in the reported quarter increased 1% year over year to $2,890.4 million. We note that gross profit climbed 12.9% year over year to $227.4 million, while gross margin expanded 70 basis points to 7.3%. Additionally, adjusted EBITDA came in at $205.4 million, up 27.1% year over year. Notably, adjusted EBITDA margin increased 130 basis points to 6.6%.

Other Financial Details

Pilgrim's Pride ended the quarter with cash and cash equivalents of $547.6 million, long-term debt (less current maturities) of $2,255.5 million and total shareholders’ equity of $2,563.8 million, excluding non-controlling interest of $11.6 million. Further, the company generated $724.2 million as cash from operating activities for the year ended on Dec 27, 2020.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.