Pilgrim’s Pride beats earnings expectations despite revenue decline

GREELEY — Pilgrim’s Pride Corp. (Nasdaq: PPC) beat Wall Street expectations for the first quarter of the year, but ongoing market troubles in Mexico and the larger impact of food demand from the coronavirus pandemic sunk the company’s pre-expense earnings by almost 20% compared to a year ago.

The Greeley-based subsidiary of JBS S.A. posted earnings of $3.07 billion and 27 cents per share in its earnings report Wednesday afternoon, beating consensus estimates collected by finance site Seeking Alpha by $90 million and 11 cents per share, respectively.

However, the company’s EBITDA fell 19% from the same period last year, from $204.4 million to $165.5 million, while its operating income fell 38.4% to $84.4 million from the same quarter last year.

In a statement, CEO Jayson Penn said much of the revenue in the U.S. for the quarter came in before coronavirus restrictions hit food-service demand. Shuttered restaurants were ordering less whole-bird and parts of poultry, while school districts pulled back on purchasing prepared foods.

Penn said the company’s 8% gain in revenue from the previous quarter in its European operations were more than offset by losses in Mexico, which had ongoing difficult economic conditions before COVID-19 became a worldwide pandemic.

“Despite the volatile and challenging markets in (the first quarter), in part due to COVID-19, our strategy has continued to achieve solid results in relative performance to industry competition, and deliver more resilient performance regardless of changes in specific market conditions,” he said.

The company borrowed $350 million from its ongoing credit lines in late March to shore up its cash position.

Penn and other company executives did not mention the worry of a production shortage, the thought of which prompted President Donald Trump to invoke the Defense Production Act for meatpackers earlier this week.

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