Pilgrim’s Pride reported Nov. 8 better-than-anticipated results for its fiscal 2017 third quarter. The company reported operating income of $372 million and generally accepted accounting principles (GAAP) earnings of 93 cents per share, up from income of $177 million and GAAP earnings of 39 cents per share in the third quarter of 2016.
Results showed that third-quarter net income was $232.7 million, up from $98.7 million during the same period in 2016. Net sales for the quarter increased to $2.79 billion. Excluding financial results for Moy Park, which Pilgrim’s acquired in September, net sales were $2.28 billion, a 37.4% increase from the third quarter of 2016.
During the third quarter, "U.S. operations were robust across all business units, and Mexico performed even better than our expectations,” Pilgrim's chief executive officer Bill Lovette stated. “The results once again demonstrated the strength and diversity of our portfolio of bird sizes and is what fundamentally differentiates us from the competition, giving us the potential to reduce volatility and generate higher margins over time.”
Despite greater availability of competing proteins, Lovette said Pilgrim's saw strong demand for chicken during grilling season and expects chicken to remain a preferred protein choice in both domestic and international markets.
Touching on the Moy Park acquisition, Lovette said the company is excited about the potential opportunities in Europe, noting that it “creates a stronger, more diverse and more stable global chicken and prepared foods leader in Pilgrim's.”
He added, “The new European operations align with our strategic priorities as we continue expanding our geographical and brands footprint and extending our global poultry leadership position into attractive new markets while providing us a strong platform for future growth in the region."
Pilgrim's also noted that the integration of GNP is progressing well; operations and profitability improved significantly, with synergy captured ahead of expectations.
Lovette said Pilgrim's continues to increase GNP performance, explaining that margins have increased by 600 basis points since the business was acquired in the first quarter of 2017.
“The integration is tracking above expectations, and we are well ahead in delivering the previously announced $30 million synergy target," he said. "Together with the success we had in improving the profitability of the acquired assets in Mexico relative to the legacy operations, we believe we have the method and the team to continue to grow the profitability of our European business."