Adjusted profit from JBS’s North American beef unit plunged almost 80% from a year earlier.
(Bloomberg) -- JBS SA, the world’s largest meat producer, posted third-quarter profit that missed analysts’ estimates as earnings from its North American beef business tumbled.
Adjusted profit from JBS’s North American beef unit — the company’s largest business — plunged almost 80% from a year earlier as profit margins narrowed, JBS said Monday in a statement. That undercut results for the Brazilian company, which posted adjusted earnings before items of $5.41 billion reais ($1.1 billion) — a 43% drop from the year-earlier period. Results missed the 5.49-billion real average estimate of analysts surveyed by Bloomberg.
Meat producers such as JBS and Tyson Foods Inc. have struggled with tighter supplies of cattle for slaughter, which have contributed to rising animal purchasing costs. The cost of buying fattened animals is on track for its third straight annual increase, with beef wholesale prices lagging, which has eroded meatpackers’ profits. JBS’s North American beef business posted adjusted earnings equivalent to 1.6% of sales, down from 7.3% a year ago.
Despite the beef woes, JBS saw resilience in its pork and chicken businesses. Profit margins at its American pork unit more than doubled from a year ago as a reduction in costs with feed and hog acquisition more than offset lower wholesale pork prices.
The performance contrasts with that of Tyson as the rival’s pork segment posted a quarterly operating loss in the three months ended September.