TOP STORIES
Pilgrim's Pride Profit Drops Sharply, But Results Beat
Projections
Pilgrim's Pride Corp. will pay shareholders a special dividend
of $2.75 a share next month, the company said Wednesday as it
reported sharply lower first-quarter profit largely tied to a drop
in U.S. exports since last year's bird-flu outbreak.
The payout--roughly $700 million--will be made on May 18 to
shareholders of record as of May 10.
Shares, down 4% over the past 12 months, rose 7% to $25.10 in
after-hours trading.
Over all, for the 13 weeks ended March 27, Pilgrim's Pride
reported a profit of $118.4 million, or 46 cents a share, down from
$204.2 million, or 79 cents a share, a year earlier.
Sales fell 4% to $1.96 billion.
Mondelez Profit Rises as Margins Strengthen--Update
Mondelez International Inc., maker of Oreo cookies and Ritz
crackers, said its profit margins continued to improve in the first
quarter despite weakening demand for its snacks in several key
countries.
Economic slowdowns in China, Brazil and Russia are weighing on
Mondelez, which derives some 80% of its revenue from overseas
markets, suggesting that situations there have worsened.
Over all, Mondelez reported a first-quarter profit of $554
million, or 35 cents a share, up from $324 million, or 19 cents a
share, a year earlier. Excluding restructuring-related expenses and
other items, adjusted per-share earnings rose to 48 cents from 41
cents.
STORIES OF INTEREST
Pilgrim's Pivots to Organic Chicken -- Market Talk
16:50 ET - No. 2 US chicken processor Pilgrim's Pride (PPC) says
it will convert one of its facilities to produce USDA-certified
organic chicken, the latest indication of how Western consumers'
growing focus on health and sustainability are forcing change at
food giants that have built empires on low-cost, large-scale
production. Pilgrim's will "deploy valuable resources, when
necessary, to accelerate our growth by offering creative solutions
to fulfill emerging consumer demand preference trends for more
natural products," CEO Bill Lovette says, though doesn't specify
how much of PPC's chicken will go organic. PPC last year announced
a big push into chicken raised without antibiotics, and its organic
plan comes as 1Q net income slides 42% following slowdown in US
chicken exports. PPC climbs 6.9% after hours. (jacob.bunge@wsj.com;
@jacobbunge)
Competition, Labor Cost Troubles for El Pollo Loco -- Market
Talk
12:48 ET - SunTrust cuts El Pollo Loco (LOCO) to neutral as it
faces increased promotional pressure and rising labor costs.
SunTrust thinks it will be hard for LOCO win back lost
value-conscious customers from larger rivals McDonald's (MCD),
Wendy's (WEN) and Burger King (QSR). California, where LOCO gets
the lion's share of revenue, has also become a battleground with
golden state rivals Taco Bell (YUM) and Jack in the Box (JACK). As
for labor costs, California raised the minimum wage earlier this
year, and plans for more increases, creating ongoing margin
pressure. SunTrust cuts price target $1 to $15. LOCO off 9% at
$13.58, but still up 7% YTD. (patrick.sheridan@wsj.com)
Heavy Trading in New McDonald's Euro Bonds -- Market Talk
0911 GMT More than EUR100 million of McDonald's new EUR2.5
billion triple-trancher is trading in the secondary market a day
after the bond was issued. The 1.75% 2028 leg is stealing the show,
having been traded more than 70 times, with volumes approaching
EUR75 billion Wednesday. This makes it the most heavily traded bond
in the entire secondary euro market, according to Trax, a
subsidiary of MarketAxess. The issue attracted more than EUR14
billion of orders in the primary market on Tuesday. It was a case
of another U.S. issuer making use of lower borrowing costs in euros
compared to U.S. dollars, BayernLB says.
(tasos.vossos@dowjones.com, @tasosvos)
FUTURES MARKETS
Prices of U.S. Cattle Futures Slip From One-Week Peaks; Hogs
Advance
CHICAGO--Prices of cattle futures ended the trading session
lower on Wednesday, pressured by profit-taking, as investors
searched for fresh signs of demand.
April live-cattle futures slid 0.8 cent, or 0.6%, to $1.2600 a
pound on the Chicago Mercantile Exchange, after climbing to a
one-week high on Tuesday. Most-actively traded cattle for June
declined 0.95 cent to $1.1780 a pound. Feeder-cattle futures for
April were down 0.275 cent at $1.4630 a pound.
CASH MARKETS
Zumbrota, Minn Hog Market Steady At $44.00 - Apr 27
Barrow and gilt prices at the Zumbrota, Minn., livestock market
today are steady at $44.00 per hundredweight.
Sow prices are steady. Sows weighing under 450 pounds are
$34.00-$35.00,
400-450 pounds are at $34.00-$35.00, 450-500 pounds are
$34.00-$35.00 and those over 500 pounds are $36.00-$37.00.
The day's total run is estimated at 100 head.
Prices are provided by the Central Livestock Association.
Estimated U.S. Pork Packer Margin Index - Apr 27
Date Standard Margin Estimated margin
Operating Index at vertically
integrated operations
*
Apr 27 +$20.43 +$ 33.46
Apr 26 +$24.34 +$ 33.74
Apr 25 +$24.08 +$ 31.05
* Based on Iowa State University's latest estimated cost of production.
A positive number indicates a processing margin above the cost of
production of the animals.
Beef-O-Meter
This report compares the USDA's latest beef carcass composite
values as a percentage of their respective year-ago prices.
Beef
For Today Choice 83.4
(Percent of Year-Ago) Select 82.9
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Wednesday fell $3.76 per
hundred pounds, to $214.81, according to the USDA. Select-grade
prices fell $4.79 per hundred pounds, to $205.59. The total load
count was 197. Wholesale pork prices fell 13 cents, to $81.30 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
April 27, 2016 17:44 ET (21:44 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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