sharply reduced earnings guidance for its December quarter Tuesday, citing weak results in Mexico and the impact of bird flu anxiety on a poultry category.
Pittsburg-based Pilgrim's expects to earn 36 cents to 41 cents a share in its first quarter, down from its old estimate of 75 cents to 85 cents a share. The forecast excludes one-time items including charges associated with the restructuring of a turkey plant that the company also detailed on Tuesday.
Analysts surveyed by Thomson First Call were forecasting earnings of 82 cents a share on sales of $1.39 billion in Pilgrim's Pride's first quarter. The company "withdrew" full-year guidance. Analysts surveyed by Thomson First Call were forecasting earnings of $3.71 a share for the year ending next September.
Pilgrim's said its average price for chicken leg quarters was 29 cents a pound in the December quarter, down from 45 cents a pound in the previous period.
"We attribute this drop in selling price primarily to the effects focus and concern over avian influenza has had on international demand for poultry products and to the disruptions caused by having to reroute product in transit to locations other than those intended as these concerns materialized," Pilgrim's said.
The company also cited poor results south of the border.
"After turning in a record performance last fiscal year, the turnabout we saw this quarter was significant as sales momentum during the Christmas holiday season in Mexico failed to live up to expectations and last year's performance," it said.
Pilgrim's Pride also said it will cease the production of ground turkey and cooked turkey deli breast meat at a plant in Franconia, Pa., resulting in the elimination of 300 jobs. The plant will now focus on salads. The company's turkey operations will now be focused on fresh and frozen whole birds produced at a plant in New Oxford, Pa. The restructuring should boost annual pretax earnings by $10 million to $15 million a year.