The JBS Greeley meatpacking facility in Greeley, Colo. (Chet Strange/Bloomberg News)
JBS SA said quarterly profit rose more than expected, with chicken making up for the bulk of the increase as the world’s largest meat supplier faces deepening losses at its U.S. beef business.
Adjusted net income for the three months ended in March rose 78% from a year earlier to 2.92 billion reais ($520.7 million), the Brazilian company said in a statement. That compares with the 2.79 billion real average of analyst estimates compiled by Bloomberg.
The result underscores how chicken has become a lifeline for major meat suppliers, including Tyson Foods Inc. and Cargill Inc., as a severe shortage of cattle in the U.S. inflates their costs and wipes out profits from beef processing.
Roughly 71% of JBS’s earnings before items such as interest and taxes in the first quarter came from its chicken operations in North America and Brazil, which benefited from cheaper feed costs and strong consumer demand. That compares with 57% a year earlier.
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JBS said its North American beef business, the company’s largest, had a loss of $112.9 million in the first quarter as surging prices for the meat it sells were more than offset by record cattle costs. Still, profits for JBS’ beef operations in Brazil and Australia rose from a year earlier.
JBS USA Holdings ranks No. 68 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 10 among agriculture and food processing carriers. Tyson ranks No. 1 on that sector list and No. 9 on the private TT100. Cargill ranks No. 21 on the sector list.
The company, which is based in Sao Paulo, is in the final stages of a plan to trade its shares in New York after receiving a green light by U.S. regulators last month. The meat producer will go to minority shareholders for a vote May 23. JBS says the move will broaden its access to capital and give it more flexibility to use equity as a source of funding.
JBS shares have soared 85% over the past year to record levels in April.
