Chicken producer Pilgrim's Pride (NYSE:PPC) told us two weeks ago that third-quarter results were going to be strong. Well, it managed to surpass even that guidance on Monday.

I'm not sure how earnings can improve in two weeks after a quarter has already closed, but Pilgrim's Pride found a way. Revenue was basically flat in comparison with the prior year, but operating margins (adjusted for restructuring charges) rose more than 2 percentage points to 9.4%. At the end of it all, the company was able to post earnings of $1.28 per share -- well above last year's level and the guidance of $1.17 to $1.22 given two weeks ago.

The domestic story could generally be characterized as "steady as she goes." Total chicken sales in the U.S. were up about 1% for the quarter. While pricing for wings and breast meat fell significantly on a year-over-year basis, pricing in general has been decent for the company.

The real story, though, appears to be overseas. Sales in Mexico were up 26% for the quarter and constituted about 10% of total sales. Likewise, export sales were up strongly -- 63.5% versus the prior year. Russia continues to be a major market for exported chicken, and that doesn't seem ready to let up just yet.

Pilgrim's Pride is also reaping substantial benefits from lower feed costs. Cost of goods sold dropped 5% in the quarter, in no small part because corn and soy meal prices were considerably lower in this quarter than in the year-ago period. Feed costs make up about one-quarter of total cost of goods sold, so those declines were more than just chicken feed.

Although Pilgrim's Pride is a fine poultry producer, this is a consummate example of a commodity company. Worldwide chicken consumption is almost surely going to continue to increase, but nobody knows what the future holds for feed prices and meat prices -- and there isn't much at all that the company can do about it. As a result, the current P/E of about 10 is probably a pretty reasonable valuation for the shares.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).