Forget beating or missing analyst estimates by a penny here or a penny there. When poultry producer Gold Kist
Given the bad news we've all heard lately from the likes of Tyson
Gold Kist's fiscal first quarter wasn't much to look at. Revenue dropped 1%, principally because of broiler prices falling about 2%. On a more positive note, the company upped its share of value-added sales relative to the overall mix, and sales to private-label customers were up solidly in terms of poundage. As we've heard from other poultry producers, though, pricing is suffering from oversupply and a reduction in exports to places like Russia: Bird flu fears apparently have some people avoiding poultry in general.
Operationally, things weren't a whole lot better. While Gold Kist's feed costs were a little lower, utilities and freight were a fair bit higher. Consequently, gross and operating margins fell, and net income took a sizable haircut from last year's level.
I'll be the first to admit that some of these food names are getting tempting. I'm not really very excited about Pilgrim's Pride, but companies like Tyson, IndustriasBachoco
A low valuation is enticing, but not let's not fool ourselves into thinking things can't get worse. Companies like Sealed Air
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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).