Higher Poultry Prices Bolster Sanderson 4Q
LAUREL, Miss. (AP) — Sanderson Farms returned to a profit during its fourth quarter, buoyed from higher poultry prices. The performance topped Wall Street expectations.
Company shares rose 2 percent before the opening bell.
For the three months ended Oct. 31, Sanderson Farms earned $9.3 million, or 41 cents per share. That compares with a loss of $21.6 million, or 97 cents per share, a year ago.
Analysts polled by FactSet expected earnings of 29 cents per share.
The prior-year period was weighed down by an income tax expense, higher feed costs, lower demand from restaurants and an inventory markdown.
Revenue climbed 16 percent to $648.4 million from $559.8 million as production increased due to a ramp up to near full production at its new processing plant in Kinston, N.C.
Wall Street forecast $630.7 million in revenue.
Shares of Sanderson Farms rose $1.02 to $50.80 in premarket trading Tuesday.
Boneless breast meat prices were about 12 percent higher in the fourth quarter, on average, than a year earlier.
Sanderson Farms Inc. said that it earned $53.9 million, or $2.35 per share, for the full year. In the prior year the company lost $127.1 million, or $5.74 per share.
Chairman and CEO Joe Sanderson Jr. said that while poultry prices climbed, grain prices rose due to drought conditions. So higher poultry prices were somewhat offset by increased feed costs.
Annual revenue for the Laurel, Miss. company rose 21 percent to $2.39 billion from $1.98 billion.