JBS Beats Profit Forecasts as Cattle Prices Jump and Costs Fall

05:16PM Nov 13, 2014
Beef Meat Grocery
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JBS SA, the world’s biggest meat producer, exceeded analysts’ estimates to post record quarterly profit on surging cattle prices and lower feed costs.

Net income rose to 1.09 billion reais ($481 million) from 220 million reais a year ago, the Sao Paulo-based company said in a statement yesterday. Adjusted earnings per share of 37.8 centavos exceeded the 24-centavo average estimate of three analysts tracked by Bloomberg.

JBS, which spent $17 billion on acquisitions in the past decade, benefited from export demand for beef and poultry as well as declining costs for corn and soybeans used as feed. Cattle shortages pushed up prices for livestock that JBS processes at its slaughterhouses, helping earnings before interest, taxes, depreciation and amortization to more than double. The Brazilian real’s 9.5 percent slump during the quarter boosted exports revenue.

“The ongoing operating improvements made by the JBS units in Brazil and worldwide throughout 2014 also allowed the company to significantly reduce its degree of leverage,” the company said in a statement accompanying the results.

Pilgrim’s Pride, the Greeley, Colorado-based poultry and processed-food company controlled by JBS, reported on Oct. 29 a 95 percent jump in third-quarter Ebitda to $442 million, the highest on record according to data compiled by Bloomberg.