Aug 1, 2006 10:50 am US/Central
Weak Pricing Root Of 2Q Loss, Company Reports
Source: PRNewswire
PITTSBURG, Texas (CBS 11 News) ―
Pilgrim's Pride Corporation (NYSE: PPC) today reported a net loss of $20.5 million, or $0.31 per share, on total sales of $1.29 billion for the third quarter ended July 1, 2006. For the third quarter of fiscal 2005, the company reported net earnings of $85.4 million, or $1.28 per share, on total sales of $1.44 billion.
"Despite recent upward trends in pricing for breast meat and leg quarters, our third-quarter results continued to reflect the challenging protein environment seen in the first half of the fiscal year," said O.B. Goolsby, Jr., Pilgrim's Pride president and chief executive officer.
"Our net loss for the third quarter of 2006 was largely due to weak pricing caused by the lingering effects of lower export demand and higher inventory levels last winter and in the early spring. We are hopeful that the recent increases in leg quarter and breast meat prices will continue as international demand for U.S. chicken products improves and the full effect of the recently announced industry production cutbacks are realized in the marketplace."
For the full third quarter, pricing for leg quarters and breast meat increased 118.8 percent and 36.2 percent, respectively, when compared to the second quarter, but were an average of 34.2 percent and 16.6 percent lower than the year-ago period.
In the third quarter, Pilgrim's Pride initiated a multi-point plan designed to improve the company's competitive position. This plan included production cuts, which had been fully implemented by the end of July, as well as a reduction in capital investment and a sharpened focus on cost reductions and improved efficiencies.
"We are pleased with the progress we have achieved on our strategic plan. Operating efficiently has never been more important than it is in the current industry environment. We believe the combination of stronger domestic and export selling prices, resumption of demand for our products in the export markets, and improved operating efficiencies should position Pilgrim's Pride for a return to profitability," Goolsby said.
For the nine months ended July 1, 2006, the Company reported a net loss of $26.7 million, or $0.40 per share, on total sales of $3.90 billion. For the first nine months of fiscal 2005, Pilgrim's Pride reported net earnings of $190.3 million, or $2.86 per share, on sales of $4.18 billion.
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