Sanderson Farms Posts Lower Q3 Earnings

Sanderson Farms, Inc. SAFM reported a drop in its profit for its fiscal third quarter on Tuesday. The Laurel, Mississippi-based company posted quarterly net income of $50.9 million, or $2.27 per share, compared to $76.1 million, or $3.30 per share, in the year-ago quarter. Its sales dropped to $739.9 million from $768.4 million. However, analysts were expecting earnings of $2.81 per share on sales of $759 million. Boneless breast meat prices shrank around 25.4 percent for the quarter, while the average market price of bulk leg quarters dropped 47.8 percent. Jumbo wing prices rose 29.5 percent in the quarter. In the latest quarter, prices paid for corn and soybean meal dropped 13.2 percent and 34.5 percent, respectively. "Sanderson Farms' financial results for the third quarter of fiscal 2015 reflect continued good demand for fresh chicken at retail grocery stores, which demand was reflected in a Georgia dock whole bird price that remained near record levels during the quarter," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. "However, market prices for most products produced at our big bird deboning plants were significantly lower during the quarter when compared to last year's third fiscal quarter. Bulk leg quarter prices remain under pressure as a result of weak export demand affected by export bans related to the discovery of avian influenza in the United States, a relatively strong United States dollar and lower oil revenue in countries with oil- based economies." Sanderson Farms shares fell 1.55 percent to close at $67.90 yesterday.