Citing grain volatility and higher chicken costs, Pilgrim’s Pride (NYSE:PPC) swung to a fourth-quarter loss from a year-earlier profit and fell sharply below Wall Street's expectations.
The Greeley, Colo.-based chicken producer reported a net loss of $85.4 million, or 40 cents a share, compared with a year-earlier profit of $41.8 million, or 20 cents.
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The results were worse than the 29-cent loss predicted on average by analysts in a Thomson Reuters poll.
“While 2011 was an extremely challenging year, it was also transformational with respect to Pilgrim's operating model,” the company’s chief executive, Bill Lovette, said in a statement.
He attributed Pilgrim’s weak results to “extreme grain volatility and increased cost inputs,” noting the industry had “burdensome levels of finished goods inventories and overproduction in the first half of the year.”
Revenue for the three-month period was $1.83 billion, up from $1.81 billion a year ago, missing the Street’s view of $1.88 billion. Sales were softened by lower chicken prices.
Pilgrim has been trying to streamline operations to reduce costs and become more efficient. It also is working to alter its pricing strategy so that it is less dependent on one-year fixed price contracts and more focused on the markets.