Zacks Investment Research | Feb 12, 2018 03:10AM ET
Pilgrim's Pride Corporation (NASDAQ:PPC) is scheduled to report fourth-quarter 2017 results on Feb 14, after the market closes.
The company pulled of positive average earnings surprise of 1.53% for the last four quarters. Notably, in third-quarter 2017 Pilgrim's Pride’s adjusted earnings of 98 cents per share surpassed the Zacks Consensus Estimate of 77 cents by 27.27%.
Let’s see how things are shaping up prior to this announcement.
Factors to Play
We fear that lingering headwinds might prove fatal for Pilgrim's Pride's performance in fourth-quarter 2017.
The company’s profitability in the upcoming quarter remains sensitive to market price as well as availability of certain products such as soybean meal, corn and sorghum. These items are used by the company as intermediate inputs in some of its offerings. Any sudden supply-demand imbalance or fluctuations in price of these materials might significantly raise the company's operational expenses, in turn, weighing on the company's bottom line in the quarters ahead.
The company also offers services in a highly competitive industry. Intense competition might lower aggregate market share and hence weigh over the company’s revenues and profitability going forward.
Also, sudden outbreak of a livestock disease or unfavorable government trading policies might hurt results going forward.
Moreover, the United States Department of Agriculture’s forecast regarding rise in global corn stocks indicates a probable decline in Pilgrim's Pride's aggregate corn exports in fourth-quarter 2017.
Earnings Whispers
Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat.
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