Sanderson Farms Reports Q3 Results (SAFM)

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Chicken producer, Sanderson Farms Inc. (NASDAQ:SAFM) reported better-than-expected fiscal third quarter earnings and revenue as sturdy demand in grocery stores helped company to raise prices of poultry products.

Nevertheless, SAFM warned that raising prices will not be sufficient to offset soaring input costs in following months as the severe draught in the Midwest region has increased feed costs. For instance, costs of soybean and corn, two main feed ingredients, have jumped at record high levels compared to average prices.

In the fiscal third quarter, the company increased prices of its whole chickens by 8.6%.  While prices of boneless breast averaged 14.7% more than the year-earlier quarter, prices of jumbo wing witnessed a twofold increase.

For the quarter, Sanderson reported that profit stood at $28.7 million, or $1.25 a share, compared with a loss of $55.7 million, or $2.51 a share, in the year earlier quarter.

Sales in the quarter climbed 22% to $624.9 million and operating margins turned positive for the quarter, at 7.8% from negative 16.5% in the corresponding period of last year.

Analysts polled by Thomson Reuters had forecasted earnings for $1.20 a shares on revenue of $620.0 million.


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