JBS shares dip after adjusted earnings miss forecasts

Shares of JBS SA (JBSS3.SA) edged lower on Friday after the Brazilian meatpacker reported adjusted earnings that fell short of market expectations for the second quarter.

The company’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled 3.2 billion Brazilian reais ($580 million), a decline of 12% from the same period last year and below the 3.5 billion reais average estimate from analysts surveyed by Refinitiv. Revenue for the quarter reached 103.5 billion reais, up 1.8% year-over-year, though this growth was offset by higher costs and weaker margins in key markets.

JBS attributed the earnings miss to persistent inflationary pressures, particularly in its North American operations, where input costs remained elevated. The company also noted softer demand in China, one of its largest export markets, as a contributing factor to the margin compression.

Chief Financial Officer Guilherme Cavalcanti said in a statement that while operational efficiency initiatives were progressing, the external environment remained challenging. "We continue to navigate a complex macroeconomic landscape marked by inflation and geopolitical uncertainties," Cavalcanti said.

Analysts at XP Investimentos downgraded the stock to "neutral" from "buy," citing the earnings miss and narrowing profit margins. The brokerage maintained a 12-month price target of 38 reais per share, down from a prior 42 reais target.

JBS’s stock closed 1.4% lower at 32.70 reais on Friday, underperforming Brazil’s benchmark Bovespa index, which gained 0.3% for the session. The decline follows a broader trend of caution among investors toward food producers amid rising input costs and fluctuating commodity prices.

The company is scheduled to host an earnings call with investors on Monday to provide further details on its financial performance and outlook.