Cal-Maine Foods Inc. Misses Q2 Views; Egg Rules Roil Outlook

Cal-Maine Foods Inc.

shares fell in the extended session after the company missed second-quarter expectations and warned that new rules for egg producers in California could hurt 2015 results. The Jackson, Miss., company which calls itself the largest U.S. producer of fresh eggs, posted net income of $36.6 million, or $0.76 a share, versus year-earlier profit of $26.1 million, or $0.54 a share. Sales increased 6.9 percent to $378.6 million, from $354.3 million a year earlier. Analysts expected $0.85 cents a share. Chief Executive Adolphus B. Baker said the company expects to benefit from more stable feed costs in 2015 compared with 2014. But Baker added that the pending legislation in California related to egg production standards and sales in California "could have a singificant impact on egg production throughout the country." Baker said however, that "it's too early to determine the outcome for our operations" and that the company expects "favorable results" in 2015. California Proposition 2, passed in 2008, becomes effective Jan. 1 and requires that cages for egg-laying hens enable the animals to lie down, stand up, extend limbs and turn around. A related state rule requires that all eggs imported into California produced following standards set by Proposition 2.