August 24, 2005

US poultry giant Sanderson Farms reports lower Q3 profit

US poultry giant Sanderson Farms said its fiscal third quarter profit fell 29 percent, following a plunge in prices for chicken parts from the previous year.

The company's Q3 net profits slipped to US$24 million, or US$1.19/share, from US$33.9 million, or US$1.69/share the previous year.

In addition, Q3 profits were reduced by US$0.07/share due to start-up costs associated with the company's new poultry plant in Georgia.

Sanderson's Q3 net sales fell 10 percent year-on-year from US$293.9 million to US$264.6 million. The company said most of the sales decline was due to a fall in chicken prices that was partially offset by lower feed ingredient costs.

While Q3 prices for Sanderson's whole chickens, boneless breasts and wings were down 6.3 percent, 41 percent and 11.2 percent respectively, prices for leg quarters were up 25.4 percent. Also, prices for feed ingredients corn and soybean meal reportedly fell by 18.3 percent and 24.2 percent respectively.