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· Pilgrim’s Shares Slump With Virus Hitting Chicken-Processing
· Pilgrim’s Pride swings to Q2 loss
Pilgrim’s Shares Slump With Virus Hitting Chicken-Processing
By Tatiana Freitas and Michael Hirtzer, Bloomberg
July 30, 2020
Pilgrim’s Pride Corp., the second-biggest U.S. chicken producer, was on track for the biggest drop in more than a month after second-quarter revenue missed analyst estimates.
Pilgrim’s was unable to process its chickens as it usually would, leading to suboptimal “mix” of chicken-product sales, the company said. Thousands of workers at American meat plants caught the virus and prompted shutdowns at major beef- and pork-processing plants. That disrupted production even if the labor crunch in the chicken sector was more limited
The company posted a loss of 2 cents a share, not adjusted, a statement Wednesday showed. Analysts were expecting a profit of 1 cent per share. The period was the first to show the full impact of the coronavirus pandemic on results.
Shares slumped Thursday by as much as 8.3%, before trimming losses to trade 6.7% lower at $15.13 as of 11:56 a.m. in New York.
In the U.S., the market was significantly challenged in the first half of the quarter before a gradual loosening of travel and movement restrictions drove an improvement in demand, especially from food service, the company said.
“After a very challenging beginning of the quarter, markets have adapted. During the month of June, results were quite encouraging and showing a noticeable improvement globally,” Fabio Sandri, interim chief executive officer for Pilgrim’s, said in the statement.
“Compared to June of last year, the U.S. was roughly the same, Europe slightly better and Mexico in-line, even when considering all the disruptions, less than optimal product mix, and added operating costs because of Covid-19,” he said.
Strong sales at quick-service restaurants should help the company in the third quarter even as it faces more protein competition from recovered beef and pork plants and still-volatile conditions in food service, Sandri said.
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Pilgrim’s Pride swings to Q2 loss
By Erica Shaffer, Meat+Poultry
GREELEY, COLO. – Pilgrim's Pride Corp. reported a net loss of $6,036,000, or 2¢ per diluted share, in the second quarter ended June 28, 2020, compared with a profit of $170,080,000, or 68¢ per diluted share, in the year-ago period. Fabio Sandri, interim chief executive officer of Pilgrim’s, cited “tough market dynamics in the US and Mexico,” in addition to pandemic-related impacts as factors influencing the company’s results.
“In the US, the first half of Q2 the market was significantly challenged before a gradual loosening of travel and movement restrictions due to Covid-19 drove an improvement in channel demand, especially from foodservice,” Sandri said. “Similar to Q1, large bird deboning was once again the most volatile this quarter, with quick moves between the lows and the highs, and remained challenging compared to 2019.
“In continuation from Q1, Mexico remained challenged as the effects of weak macro conditions, which added to uncertainties in consumer spending, have persisted,” Sandri said. “In addition, the Peso continued to be weak putting additional pressure on the results. Industry prices were also below seasonality, driven by much better than expected growing conditions, before reverting closer to normal levels by the end of the quarter. Our increased share of non-commodity products, strong execution, and growth in Prepared Foods, have also helped to partially offset the softness.”
Net sales for the second quarter were $2.8 billion was down 0.7% from $2.8 billion reported in the second quarter ended June 30, 2019.
“We are once again extremely proud of our team for their continued commitment, dedication and hard work, in supporting our ability to keep our team members safe and healthy, and allowing us the capability to maintain production and supply to our customers during this unprecedented crisis,” Sandri said. “Despite the continuing volatility and very challenging markets in Q2 due to COVID-19, our diversified strategy has continued to produce respectable results in relative performance to industry competition and deliver more resilient performance regardless of changes in specific market conditions.”
For the six months ended June 28, 2020, net income attributable to Pilgrim’s Pride was $61,232,000...