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Pilgrim's Pride's (PPC) Q4 Loss Miss Estimates, Sales Up Y/Y
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Pilgrim’s Pride Corporation (PPC - Free Report) reported fourth-quarter 2022 results, with the bottom line missing the Zacks Consensus Estimate and deteriorating from the year-ago quarter’s level. Nevertheless, the company’s top line increased year over year.
The company’s portfolio diversification strategies, operational excellence and Key Customer partnerships have been driving growth. However, persistent inflation with rising input costs like grain, utilities, and labor were headwinds.
Q4 in Detail
The company reported an adjusted loss of 49 cents a share, which deteriorated from earnings of 56 cents reported in the year-ago quarter. The Zacks Consensus Estimate for the bottom line was pegged at break even for the quarter.
The producer, marketer and distributor of fresh, frozen and value-added chicken and pork products generated net sales of $4,127.4 million, which increased 2.2% from the year-ago quarter’s level. Net sales increased in Europe, Mexico and the U.S. operations.
Pilgrim's Pride Corporation Price, Consensus and EPS Surprise
Net sales in the U.S. operations were $2,430.3 million, up from $2,399 million reported in the year-ago quarter. Management highlighted that in the U.S. business, its Small Bird, Case Ready and Prepared Foods businesses delivered improved results in the quarter, which offset major declines in cutout values affecting the commodity unit. The company’s performance in the U.S. reflects gains from Key Customer partnerships and diversification in bird sizes and branded offerings. Management is on track with investments in expansion at the Athens, GA plant, construction of a protein conversion plant in South Georgia and several automation projects to enhance its portfolio.
Mexico operations generated net sales of $462.4 million in the reported quarter, up from $426.7 million in the prior-year quarter. Pilgrim's Pride’s Mexico business witnessed improved results throughout the quarter, with market conditions improving sequentially. Its operations also recovered from the live challenges.
Net sales from Europe operations rose to $1,234.6 million in the quarter under review from $1,213 million in the prior year. The company’s U.K. and Europe businesses gained from continued operational excellence initiatives in manufacturing and back office integration, which resulted in consistent growth in adjusted EBITDA during the year.
Pilgrim's Pride’s cost of sales increased to $4,031.6 million from $3,686.3 million reported in the year-ago quarter. Gross profit slumped to $95.8 million from $352.5 million. Adjusted EBITDA of $62.9 million decreased from $316.7 million reported in the year-ago quarter. Adjusted EBITDA margin of 1.5% contracted from 7.8% reported in the year-ago quarter.
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Other Financial Details
The company ended the quarter with cash and cash equivalents of almost $401 million, long-term debt (less current maturities) of $3,166.4 million and total shareholders’ equity of $2,853.3 million. The company generated $669.9 million of cash from operating activities for year ended Dec 25, 2022.
The Zacks Rank #4 (Sell) company’s shares have slumped 21.4% in the past six months compared with the industry’s decline of 17.6%.
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current fiscal-year sales and earnings suggests growth of 7.2% and 12.7%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings suggests an increase of 19.6% and 90.4%, respectively, from the year-ago reported number.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, carries a Zacks Rank 2 (Buy). MDLZ has a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for Mondelez’s current financial-year sales and earnings suggests growth of 8.6% and 7.5%, respectively, from the corresponding year-ago reported figures.
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Pilgrim's Pride's (PPC) Q4 Loss Miss Estimates, Sales Up Y/Y
Pilgrim’s Pride Corporation (PPC - Free Report) reported fourth-quarter 2022 results, with the bottom line missing the Zacks Consensus Estimate and deteriorating from the year-ago quarter’s level. Nevertheless, the company’s top line increased year over year.
The company’s portfolio diversification strategies, operational excellence and Key Customer partnerships have been driving growth. However, persistent inflation with rising input costs like grain, utilities, and labor were headwinds.
Q4 in Detail
The company reported an adjusted loss of 49 cents a share, which deteriorated from earnings of 56 cents reported in the year-ago quarter. The Zacks Consensus Estimate for the bottom line was pegged at break even for the quarter.
The producer, marketer and distributor of fresh, frozen and value-added chicken and pork products generated net sales of $4,127.4 million, which increased 2.2% from the year-ago quarter’s level. Net sales increased in Europe, Mexico and the U.S. operations.
Pilgrim's Pride Corporation Price, Consensus and EPS Surprise
Pilgrim's Pride Corporation price-consensus-eps-surprise-chart | Pilgrim's Pride Corporation Quote
Net sales in the U.S. operations were $2,430.3 million, up from $2,399 million reported in the year-ago quarter. Management highlighted that in the U.S. business, its Small Bird, Case Ready and Prepared Foods businesses delivered improved results in the quarter, which offset major declines in cutout values affecting the commodity unit. The company’s performance in the U.S. reflects gains from Key Customer partnerships and diversification in bird sizes and branded offerings. Management is on track with investments in expansion at the Athens, GA plant, construction of a protein conversion plant in South Georgia and several automation projects to enhance its portfolio.
Mexico operations generated net sales of $462.4 million in the reported quarter, up from $426.7 million in the prior-year quarter. Pilgrim's Pride’s Mexico business witnessed improved results throughout the quarter, with market conditions improving sequentially. Its operations also recovered from the live challenges.
Net sales from Europe operations rose to $1,234.6 million in the quarter under review from $1,213 million in the prior year. The company’s U.K. and Europe businesses gained from continued operational excellence initiatives in manufacturing and back office integration, which resulted in consistent growth in adjusted EBITDA during the year.
Pilgrim's Pride’s cost of sales increased to $4,031.6 million from $3,686.3 million reported in the year-ago quarter. Gross profit slumped to $95.8 million from $352.5 million. Adjusted EBITDA of $62.9 million decreased from $316.7 million reported in the year-ago quarter. Adjusted EBITDA margin of 1.5% contracted from 7.8% reported in the year-ago quarter.
Image Source: Zacks Investment Research
Other Financial Details
The company ended the quarter with cash and cash equivalents of almost $401 million, long-term debt (less current maturities) of $3,166.4 million and total shareholders’ equity of $2,853.3 million. The company generated $669.9 million of cash from operating activities for year ended Dec 25, 2022.
The Zacks Rank #4 (Sell) company’s shares have slumped 21.4% in the past six months compared with the industry’s decline of 17.6%.
Solid Food Picks
Some better-ranked stocks are Conagra Brands (CAG - Free Report) , Lamb Weston (LW - Free Report) and Mondelez International, Inc. (MDLZ - Free Report) .
Conagra, a consumer-packaged goods food company, currently sports a Zacks Rank #1 (Strong Buy). CAG has a trailing four-quarter earnings surprise of 8.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Conagra’s current fiscal-year sales and earnings suggests growth of 7.2% and 12.7%, respectively, from the corresponding year-ago reported figures.
Lamb Weston, which is a frozen potato product company, currently sports a Zacks Rank #1. LW has a trailing four-quarter earnings surprise of 52.6%, on average.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year sales and earnings suggests an increase of 19.6% and 90.4%, respectively, from the year-ago reported number.
Mondelez International, which manufactures, markets, and sells snack food and beverage products, carries a Zacks Rank 2 (Buy). MDLZ has a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for Mondelez’s current financial-year sales and earnings suggests growth of 8.6% and 7.5%, respectively, from the corresponding year-ago reported figures.