PITTSBURG, Texas – Pilgrim’s Pride Corp. notified lenders on Thursday that it expects to report a significant loss in the fiscal fourth quarter. The company made the announcement after its shares dropped 38 percent on Wednesday.

The company attributed the anticipated loss to high feed-ingredient costs, continued weak pricing and demand for breast meat, and the significant negative impact of hedged grain positions during the quarter.

As a result of this expected loss, Pilgrim's Pride informed its lenders that it does not expect to be in compliance with its fixed-charge coverage ratio covenant under its principal credit facilities as of the fiscal year ending Sept. 27, the end of the quarter, but expects to be in compliance with all other covenants as of the end of the 2008 fiscal year.

Pilgrim's Pride also announced that it believes it has reached an understanding with the agents under its credit facilities to temporarily waive the fixed-charge coverage ratio covenant through October 28, 2008, and to provide continued liquidity under these facilities during this same period.

The company did not say how much the loss would be in its statement.

Like other meat processors, Pilgrim’s Pride has struggled against high feed costs and low prices for its products. Earlier this week, the company announced job cuts at its El Dorado, Ark. plant.


Source: Pilgrim’s Pride Corp., Associated Press