In a press release dated July 31st Pilgrim’s Pride Corp. (PPC) announced results for the 2nd Quarter FY 2024 ending June 30th. The quarterly figures showed positive earnings for all three segments with higher revenue and operating profit across all three geographic areas. Earnings were appreciably above Q2 2023 and exceeded consensus estimates on non-GAAP by 29 percent but fell short of consensus revenue of $4,620 million by 1.3 percent.
The following table summarizes the results for Q2 2024 derived from the SEC 10-Q form and the Company release. Values are compared with the corresponding Q2 FY 2023 (Values expressed as US$ x 103 except EPS)
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2nd Quarter 2024 and 2023, Ending
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June 30th 2024
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June 25th 2023
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Difference (%)
|
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Sales:
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$4,559,314
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$4,308,091
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+5.8
|
|
Gross profit:
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$691,626
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$278,425
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+148.4
|
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Operating income:
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$440,790
|
$100,271
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+339.6
|
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Pre-tax Income
Net Income
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$427,173
$326,303
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$45,683
$60,456
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+835.1
+439.7
|
|
Diluted earnings per share:
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$1.37
|
$0.26
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+426.1
|
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Gross Margin (%)
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15.2
|
6.5
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+133.8
|
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Operating Margin (%)
|
9.7
|
2.3
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+321.7
|
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Profit Margin (%)
|
7.2
|
1.4
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+414.2
|
|
Long-term Debt and other liabilities1:
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$3,217,044
|
$3,381,021
|
-4.8
|
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12 Months Trailing:
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|
|
|
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Return on Assets (%)
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7.4
|
|
|
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Return on Equity (%)
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22.2
|
|
|
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Operating Margin (%)
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10.5
|
|
|
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Profit Margin (%)
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4.3
|
|
|
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Total Assets
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$10,078,457
|
$9,810,361
|
+2.7
|
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Intraday Market Capitalization
August 2nd ‘24/ Sept. 30th ‘23
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$9,830,000
|
$5,400,000
|
+82.0
|
Notes.
1. June 30th 2024/ December 31st 2023.
- Q2 2024, $15.9 million investment loss (Q2 2023, $7.6 million gain)
- Q2 2024 $0.5 million miscellaneous income (Q2 2023, $1.3 million loss)
- Q2 2024 $2.2 million gain in foreign currency transactions (Q2 2023 $16.4 million loss)
Operating income and sales posted by the three business segments during Q2 2024 were:-
U.S. 69.9 percent of company operating income on 58.3 percent of sales
Europe 5.4 percent of company operating income on 28.6 percent of sales
Mexico 24.7 percent of company operating income on 13.1 percent of sales
52-Week Range in Share Price of PPC: $22.33 to $44.62. 50-day Moving average, $37.64
Market Close: July 31st pre-release $41.71.
Open: August 1st post-release $43.35.
Current Forward P/E 13.3 Beta 0.8
Equity held by insiders and holding Company: 82.6 percent, Institutions, 16.4 percent
In commenting on Q2 results Fabio Sandri, CEO stated, “Our global portfolio delivered significant year-over-year profitability growth. We remained disciplined in the execution of our strategies, focusing on what we can control and continuing to expand our relationships with Key Customers, elevating our performance as market fundamentals became increasingly attractive,”
Sandri continued “In the U.S., Big Bird realized benefits from enhanced commodity cutout values, further production efficiencies and lower input costs; Case Ready and Small Bird delivered above market growth with Key Customers through differentiated and customized offerings; and Prepared Foods increased its marketplace presence through innovation of branded, value-added items across retail and food service. Our diversified U.S. portfolio enabled our business to capture market upside as conditions evolved in the commodity market. At the same time, we also worked in partnership with our Key Customers to cultivate demand through promotional activity and innovation, further creating value for our customers and consumers alike. We also continued to strengthen our quality and service through operational excellence,” remarked Sandri.
Addressing Europe, Sandri stated, “Consumer sentiment improved as wage growth surpassed inflation. Given this environment, the team optimized mix with Key Customers and drove branded offerings. Additionally, the team identified and implemented our plan to optimize our manufacturing network and increase efficiencies. Europe’s performance demonstrates the robust nature of our strategies and agility of our team. Our diversified portfolio allowed us to rapidly adjust to consumer preferences and meet Key Customer needs. These efforts were further amplified by continued operational excellence to improve production efficiencies,”
In relation to Mexico Sandri observed, “ We improved given continued balance in supply and demand fundamentals in the commodity market, growth with Key Customers across retail and foodservice, and increased momentum of branded offerings in both Fresh and Prepared. Investments in operational excellence to enhance biosecurity in live operations and build capacity also remained on schedule. Mexico continues to drive growth above market for our Key Customers and branded offerings. Given our investments to expand production, we have an opportunity to further develop our marketplace presence and diversify our portfolio,”
Sandri concluded, “The ramp up of our recently completed protein conversion plant in South Georgia remains on schedule and continues to cultivate additional business from Key Customers. Our investment in protein conversion reinforces our strategies to drive profitable growth and mitigates our operational risk. We will continue to explore opportunities to strengthen our business and further diversify our portfolio,”