Pilgrim’s Pride’s financial problems have been known for months, since it said in late September it would post a “significant loss” in the fourth quarter, citing woes from hedging of feed inputs like corn. It has had to extend its temporary credit line three times since September -? most recently as last week. Its third extension was set to expire Monday afternoon. Last month, in accordance with rules set by its lenders, the company hired a chief restructuring officer, and has maintained since its credit issues surfaced in September that it wanted to avoid filing for bankruptcy.
After the market closed Friday, the poultry producer said in a filing with the Securities and Exchange Commission that it would delay filing its 2008 annual financial report, which had been due Novo. 26. It expects to post a loss of $802 million, or $10. 83 per share, on sales of $2. 17 billion for the fourth quarter, which ended Swept. 27. Those results include a non-cash charge of $501. 4 million, or $6. 77 a share due to the impairment of goodwill related to its acquisition of Gold Kits, and an income tax valuation allowance of $35 million, or 47 cents a share, against net operating losses.
The nation’s meat makers, especially Pilgrim’s Pride, are hurting as their profits shrink in the wake of high commodity prices for key inputs like corn and oil. Those prices are moderating after reaching record highs this summer, but they are still high for producers. Further hurting the industry is a drop in demand in foddering, since cash-strapped consumers are cutting back on their restaurant spending, and an oversupply of meat on the market. Both of those factors are keeping prices down and making it more difficult for meat makers to recoup their high input costs.
