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Pilgrim's Pride (PPC) Beats Q2 Earnings, Misses on Revenues

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Premium consumer goods company, Pilgrim's Pride Corporation (PPC - Free Report) reported mixed second-quarter 2017 results.

Earnings

The company’s quarterly earnings of 94 cents per share surpassed the Zacks Consensus Estimate of 85 cents. The bottom line also came in higher than the year-ago tally of 60 cents per share.

Revenues

In the reported quarter, Pilgrim's Pride generated net revenue of $2251.6 million, up 11% year over year. However, the top line fell short of the Zacks Consensus Estimate of $2,271 million.

Revenues from the company's U.S. operations, which account for nearly 83.6% of the total revenue, climbed 12.2% year over year. Revenues from the Mexican business – 16.4% of the total revenue – were up 5.3% year over year.

Pilgrim's Pride Corporation Price, Consensus and EPS Surprise

 

Pilgrim's Pride Corporation Price, Consensus and EPS Surprise | Pilgrim's Pride Corporation Quote

Costs/Margins

Pilgrim's Pride's cost of sales in the reported quarter increased 4.8% year over year to $1,826.2 million. Gross margin contracted 480 basis points (bps) year over year to 18.9%.

Selling, general and administrative expenses advanced 24.5% year over year to $61.6 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin came in at 18.68%, expanding 473 bps year over year.

Balance Sheet/Cash Flow

Pilgrim's Pride exited the quarter with cash and cash equivalents of approximately $303.9 million, up from $120.3 million at the end of 2016. Long-term debt (net of current portion) was $1,404.3 million, as against $1,011.9 million as of Dec 25, 2016.

In the reported quarter, the company generated $316.1 million of cash from its operating activities, up 9.4% year over year. Capital spending totaled $174.2 million compared to $94 million incurred in the year-ago quarter.

Outlook

Pilgrim's Pride is well poised to boost its near-term profitability on the back of a well-balanced product portfolio. This Zacks Rank #2 (Buy) company also believes that the advanced product offerings under the GNP Company’s brands would increase its market demand in the quarters ahead. Also, the capital investments programs are anticipated to generate benefits, moving ahead.  

Other Stocks to Consider

Some other top-ranked stocks in the industry are listed below:

Kellogg Company (K - Free Report) has an average positive earnings surprise of 6.16% for the last four quarters and currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Inter Parfums, Inc. (IPAR - Free Report) holds a Zacks Rank #2 and has an average positive earnings surprise of 15.58% for the past four quarters.

Energizer Holdings, Inc. (ENR - Free Report) , which also carries a Zacks Rank #2 at present, generated an average positive earnings surprise of 21.55% over the trailing four quarters.

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