It has been about a month since the last earnings report for Pilgrim's Pride (PPC Quick QuotePPC - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Pilgrim's Pride due for a breakout? 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 Q1 Earnings Beat Estimates, Sales Rise Y/Y

Pilgrim's Pride reported impressive first-quarter 2021 results, with the top and the bottom line increasing year over year. The upside can be attributed to product portfolio strategy, operational endeavors and Key Customer strategy that helped mitigate the impact of tough market conditions amid the pandemic. Undeniably, healthy performance across all regions in which the company operates contributed to the results. Moreover, earnings surpassed the Zacks Consensus Estimate during the quarter.

Pilgrim's Pride reported first-quarter adjusted earnings of 42 cents a share that increased significantly from 12 cents posted in the year-ago quarter. Moreover, the quarterly earnings surpassed the Zacks Consensus Estimate of 27 cents. The company enerated net sales of $3,273.4 that increased 6.5% from the year-ago quarter’s levels. Notably, net sales increased in Mexico, U.K. and Europe as well as the United States operations.

Net sales in the U.S. operations amounted to $1,999.6 million, up from $1,926.9 million reported in the year-ago quarter. The company stated that market conditions in region improved during the quarter, despite some challenges related to severe weather in the southeast during February.

Moreover, it is seeing recovery in the foodservice business as pandemic-led restrictions are being eased. The company’s retail and QSR business remained strong on solid demand which was countered by increased input and operating costs as well as unfavorable mix. U.S. Prepared Foods business continues to gain traction. Also, its market for commodity large bird deboning saw improvements.

Mexican operations generated net sales of $419.1 million in the reported quarter, up from $325.8 million posted in the prior-year quarter. Management notified that normalization in economic environment, balanced supply/demand scenario and increased share of non-commodity products favorably impacted Mexican operations. Markedly, demand for Prepared Foods in the region also increased.

Net sales from U.K. and Europe operations rose from $822.3 million posted in the year-ago quarter to $854.7 million. The company highlighted that its combined European business continues to gain on operational improvements that were countered by increased feed costs, and reduction in year-over-year foodservice volume among others. However, export restrictions to China were a cause of concern in the quarter.

Pilgrim's Pride’s cost of sales in the reported quarter increased to $3,012.2 million from $2,897.8 million reported in the year-ago quarter. We note that gross profit climbed from $177.1 million to $261.2 million. Additionally, adjusted EBITDA came in at $253.8 million, up 53.4% year over year. Notably, adjusted EBITDA margin increased 240 basis points to 7.8%.

Other Financial Details

Pilgrim's Pride ended the quarter with cash and cash equivalents of $367 million, long-term debt (less current maturities) of $2,350.4 million and total shareholders’ equity of $2,735.8 million. Further, the company used $143.6 million as cash from operating activities for three months ended on Mar 28, 2021.

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.