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Pilgrim’s takes a drubbing in media and marketplace
Pittsburg-based Pilgrim’s Pride Corp. stock was down more than 5 percent in Tuesday afternoon trading after the company announced plans to raise $180 million by selling 7.5 million shares at $24.00 per share.
After closing Monday at $25.86, Pilgrim’s shares were trading at $24.49 Tuesday afternoon, down $1.38 per share or 5.34 percent. Besides taking a drubbing on the New York Stock Exchange, the nation’s largest chicken producer was also getting some negative financial press.
“Pilgrim’ Pride shares get fried” proclaimed a mid-afternoon Forbes.com headline. “Humbled Pilgrim’s Pride” read an earlier headline by the same Web site.
The Associated Press quoted market analyst Farha Aslam with Stephens Inc., who said she was surprised the company took the route of selling more stock.
“We are surprised that the company is choosing to issue equity at the bottom of a commodity cycle, particularly given that the company had negotiated more liberal terms in its credit agreements,” she told AP.
On the upside, Aslam said with production cuts and seasonal demand, boneless skinless breast meat prices are already up 20 cents a pound to $1.46 a pound. She said prices are expected to top $1.80 a pound by summer.
In the past 12 months, the company’s stock dropped 30.7 percent although it is up from its 52-week low point reached about six weeks ago when shares were trading at $18.50.
On May 5, Pilgrim reported a widening of losses in its fiscal second quarter, ended March 29, to $111.4 million on sales of $2.1 billion, compared to losses of $40.1 million, or 60 cents loss per share, on sales of $2.0 billion in the year-earlier quarter.
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