Pilgrim’s Pride Corp. rose as much as 11 percent, the most since Jan. 15, after the second-biggest chicken processor in the U.S. reported higher profit on lower feed costs.
Second-quarter net income increased 27 percent to $241.5 million from a year earlier, according to a statement released after the close of trading Wednesday. Excluding one-time items, adjusted earnings a share for the company was 94 cents, 5 cents more than the average of five analysts estimates compiled by Bloomberg. On Wednesday, Pilgrim’s Pride approved a $150 million share buyback over the next 12 months.
“Poultry producers continue to perform well as the pricing environment remains favorable despite higher production,” said Kenneth Shea, a Bloomberg Intelligence senior analyst based in Princeton, N.J. “High corn and soybean stocks are keeping feed costs low.”
Pilgrim’s rose 9 percent to $21.92 in afternoon trading.
Pilgrim Pride’s second-quarter revenues fell 6.1 percent as exports to Mexico, which account for a 10th of company sales, declined 14 percent this quarter, Shea said. This year the dollar has risen 11 percent against a basket of 10 currencies tracked in a Bloomberg Index.
In an earnings call Thursday, the company said it’s making plans in case of a breakout of avian influenza this year. A previous outbreak caused egg prices as of the end of June to soar to the highest on record, according to the Bureau of Labor Statistics.
Poultry “producers have not been materially affected thus far” by the outbreak, said Shea, but “this could change overnight.”
Brazil’s JBS SA owns 75 percent of Pilgrim’s shares.
