Pilgrim's Pride Corp., the second-biggest U.S. poultry processor, said second-quarter profit rose more than the company expected as sales improved in Mexico. The shares gained the most in three months.
Profit was 71 cents to 76 cents a share in the three months ended April 2, up from 50 cents in the year-earlier quarter, Texas-based Pilgrim's Pride said Monday in a preliminary earnings statement. The company will release final results for the quarter on April 25.
The company, which has a distribution center in Salt Lake City, previously forecast profit of 52 cents to 62 cents.
The market for chicken in Mexico, where Pilgrim's Pride is the second-largest producer, is growing 4 percent to 5 percent a year, Chief Financial Officer Richard Cogdill said in an interview. Industrias Bachoco SA de CV, Mexico's top poultry producer, said Feb. 2 that fourth-quarter chicken sales rose almost 25 percent and that chicken prices were up 14 percent.
"Increased global demand for chicken is accelerating revenue and looks like it will continue," said Ivan Feinseth, managing director for Matrix USA LLC, a research and investment management company in New York. "The company is becoming more efficient in operations." Feinseth initiated coverage with a "strong buy" recommendation Thursday.
Shares of Pilgrim's Pride rose $1.82, or 5.2 percent, to $36.99 Monday in New York Stock Exchange composite trading, the biggest one-day gain since Jan. 10. Before Monday, they had gained 61 percent in the past year.
Pilgrim's Pride processes about 30 million birds a week, producing more than 6 billion pounds of chicken annually, the company said on its Web site. Three of the company's 26 chicken-processing plants and 13 of 30 distribution centers are in Mexico. About 4,000 farms in the U.S. and Mexico supply poultry for the company.
The preliminary report excludes a one-time gain of up to 10 cents a share related to settlement of a lawsuit in late March, which may be part of the second-quarter results, Pilgrim's Pride said.
Springdale, Arkansas-based Tyson Food Inc. is the world's biggest chicken processor.