Sanderson Farms, Inc. (SAFM: Quote) reported second-quarter profit of $23.87 million or $1.04 per share versus loss of $16.28 million or $0.74 per share a year ago.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.95 per share. Analysts' estimates typically exclude special items.
Net sales were up to $595.05 million from $479.34 million in the prior-year quarter. Analysts expected revenues of $591.25 million.
"The results for our second quarter of fiscal 2012 reflect improved market conditions driven primarily by a decrease in the supply of poultry products," said Joe Sanderson, chairman and chief executive officer of Sanderson Farms, Inc. "Our net sales were 24.1 percent higher than during the second quarter of fiscal 2011, reflecting increased production and higher average sales prices of chicken. We sold approximately 10.8 percent more pounds of poultry products during the quarter as a result of increased production at our Kinston, North Carolina facility. This increase was partially offset by our previously announced four percent production cut at our other facilities. Demand for chicken remains steady from retail grocery store and export customers...
Our profitability for the second quarter continued to be adversely affected by relatively high feed costs. Feed costs in flocks sold decreased 9.8 percent compared to last year's second fiscal quarter, but remained high relative to historical costs..."
Looking ahead, the company said it will continue to closely monitor the chicken markets and production levels as it heads into the summer months and what is typically a period of better demand for chicken. Weekly broiler egg sets continue to run below last year's numbers, and breeder placements are lower. With economic conditions continuing to affect consumer behavior, Sanderson expects to see continued soft casual dining demand.
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by RTT Staff Writer
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