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| Pilgrim's Pride shares jump on results |
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Shares in Pilgrim's Pride jumped 6% after the US poultry producer reported its third consecutive quarterly profit, despite concerns over the impact of rising grain costs.
The group, which Brazil-based JBS bought from bankruptcy late in 2009, revealed earnings of $42.9m for the July-to-September quarter, compared to a loss of $162.5m in the same quarter of 2011.
Pilgrim's Pride reported a return of $0.17 a share, well above Wall Street expectations of a $0.06-a-share.
Remodelling continues
"Our execution of the strategy implemented during the past 18 months has provided for vast improvement in our results, even in an uncertain and volatile environment," Bill Lovette, the Pilgrim's Pride chief executive, said.
Pilgrim's Pride has undergone a dramatic restructuring of its business operations under Lovette's tenure as CEO, including a revamp of staff incentives and exploiting America's growing export presence.
The most recent of which was the sale of its commercial egg operations to Cal-Maine Foods Inc. during August. The sale included two production complexes together with land located near Pittsburg, Texas.
Feed costs push up meat price
Near record grain prices still remain a major headache for the market as a whole however with Pilgrim's Pride reporting a $109m year-on-year increase in its feed costs.
This has had a knock-on effect on meat prices with producers forced to pass on rising feed costs to the consumer. A decline in cold storage stocks has also bolstered prices.
The price of breast meat has risen 7% from level seen a year ago to an average $1.40 a pound; wings have seen an even greater 73% rise to average $1.89 a pound. Leg quarters were however little changed at $0.52 a pound.
Volatility remains
Despite the volatile market conditions the results reflect the efforts made since the company's bankruptcy.
"Even with rapidly increasing input costs impacting our live inventories, we demonstrated effective management of working capital that resulted in positive cash flows". Mr Lovette said.
Pilgrim's Pride shares stood at $5.25 shortly after the start of trading in New York. Shares had traded as high as $8.68 in June this year.
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