(Reuters) - Chicken producer Pilgrim's Pride Corp expects a significant fourth-quarter loss because of high feed costs, weak pricing and demand for breast meat, along with the negative impact of hedged grain positions, it said on Thursday.
The company's statement came a day after its shares fell as much as 40 percent to a five-year low on credit worries before being halted.
Pilgrim's Pride also said it does not expect to comply with a covenant under its principal credit facilities for the fiscal year ending September 27, 2008.
The company said it believes it has reached an understanding with its lenders to waive temporarily the fixed-charge coverage ratio covenant through October 28, and to provide continued liquidity under these facilities during the same period.
The Pittsburg, Texas-based company said it expects to comply with all other covenants by the end of this year.
U.S. meat companies' stock has suffered as investors worry that credit may be harder to get in the deepening financial crisis.
The companies have been hurt this year largely because of high prices for feed and fuel. Chicken companies, in particular, have struggled because prices for breast meat, a key revenue producer, have been weak.
Also, concerns about the U.S. economy have led some analysts to believe that consumers may shift to less expensive foods.
Shares of Pilgrim's Pride closed down 38 percent at $6.37 on the New York Stock Exchange on Wednesday.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Paul Bolding)
