JBS Reports Nearly Flat Quarterly Profit as High U.S. Cattle Costs Pressure Margins

BY COMFORT OGBONNA

Brazilian food giant JBS, the world’s largest meatpacking company, reported a nearly unchanged net profit for the fourth quarter on Wednesday as record revenue was offset by tighter margins across key operations, particularly within its U.S. beef business.

The company, which produces a wide range of protein products including beef, poultry and pork, posted a net profit of $415 million for the October–December period. The figure represented a modest increase of about 0.5% compared with the same quarter a year earlier. However, the result came in slightly below analysts’ expectations, which had projected profit of approximately $428 million.

Despite the relatively flat profit growth, the company reported strong overall sales performance. Revenue for the quarter rose 15% year-on-year to a record $23.06 billion, surpassing analysts’ expectations of about $22.38 billion. The increase was driven by strong demand and record sales in both North American and Brazilian beef operations, underscoring the continued global appetite for protein products.

Even with the strong sales numbers, profitability faced pressure from rising costs in the United States. Tight cattle supplies across the country have pushed livestock prices significantly higher, increasing input costs for processors. This trend has squeezed margins in JBS’s North American beef division, which remains the company’s largest business segment by revenue.

Chief Executive Gilberto Tomazoni said the supply outlook for U.S. cattle remains challenging and is unlikely to improve significantly during the current year. According to Tomazoni, the livestock industry is currently experiencing a downturn in the cattle production cycle, which has limited herd sizes and driven up prices for animals.

He noted that the company expects the difficult supply environment to persist throughout the year. However, he added that steady consumer demand for beef could help offset some of the cost pressures faced by producers and processors.

In addition to supply constraints, the company is also dealing with labor challenges in the United States. A strike at one of its meat processing facilities in Colorado has created operational difficulties, adding another layer of complexity to its North American business operations.

Despite these challenges, analysts noted that the performance of JBS’s North American beef division still exceeded expectations. Analysts at JPMorgan Chase said the unit demonstrated resilience in the face of high cattle prices and margin pressure.

According to their analysis, the division benefited from strong consumer demand in the U.S. market as well as disciplined cost management strategies implemented by the company. Even though margins declined compared with the previous year, the overall performance showed that demand for beef products remains robust despite rising retail prices.

Analysts at Banco Santander also highlighted factors that helped mitigate the impact of high livestock costs. They pointed to derivatives contracts used by the company that may have helped offset some of the financial pressure caused by rising cattle prices. Additionally, they noted that beef demand has remained strong globally, even as prices have climbed.

Overall profitability for the company declined slightly when measured by adjusted earnings before interest, tax, depreciation and amortization (EBITDA). JBS reported adjusted EBITDA of $1.72 billion for the quarter, a 7% decline from the previous year. Nevertheless, the result exceeded analysts’ forecasts of approximately $1.56 billion.

The company’s adjusted EBITDA margin also declined during the quarter, falling by 1.8 percentage points to 7.4%. The decrease reflects the broader margin pressures facing the meat processing industry, particularly in markets where livestock costs are rising faster than selling prices.

In after-hours trading, shares of JBS showed little movement following the earnings announcement. Alongside its results, the company also revealed plans to distribute dividends totaling $1 per share to investors.

Beyond the challenges within its core operations, JBS is also navigating changes in the global trade environment. Tomazoni said that ongoing geopolitical tensions involving the United States, Israel and Iran have increased logistics costs across global supply chains. Even so, he noted that international trade flows remain open and the company has not observed any significant decline in protein demand across the Persian Gulf region.

The company operates three factories in the Middle East, and Tomazoni confirmed that all of them continue to operate normally despite the broader geopolitical tensions affecting the region.

Another emerging challenge for the global beef industry involves changes in trade policies from China, one of the world’s largest importers of beef. The country has introduced new restrictions on beef imports in 2026, including quotas and tariffs affecting major supplier nations.

These measures could limit the ability of exporters to expand shipments into the Chinese market, forcing companies such as JBS to adjust their export strategies. Tomazoni said Brazil may need to redirect some of the beef volumes originally destined for China to other international markets.

He added that increased domestic sales within Brazil could partially compensate for the impact of the restrictions. However, the company will likely need to explore alternative export destinations as global trade patterns shift in response to China’s new import policies.

Despite these challenges, JBS remains one of the most influential companies in the global food supply chain. Its ability to adapt to shifting market conditions, fluctuating livestock supplies and changing international trade rules will play a crucial role in determining its performance in the coming year.