Sanderson Farms, Inc. reports results for third quarter of fiscal 2016
Sanderson Farms, Inc. has reported results for the third fiscal quarter and nine months ended July 31, 2016.
Net sales for the third quarter of fiscal 2016 were US$728.0 million compared with US$739.9 million for the same period a year ago. For the quarter, the company reported net income of US$54.7 million, or US$2.42 per share, compared with net income of US$50.9 million, or US$2.27 per share, for the third quarter of fiscal 2015.
Net sales for the first nine months of fiscal 2016 were US$2,025.2 million compared with US$2,123.9 million for the first nine months of fiscal 2015. Net income for the first nine months of fiscal 2016 totaled US$113.0 million, or US$5.01 per share, compared with net income of US$188.6 million, or US$8.28 per share, for the first nine months of last year.
"Sanderson Farms' financial results for the third quarter of fiscal 2016 reflect a continued favorable balance of the supply and demand for fresh chicken sold to retail grocery store customers," said Joe F. Sanderson, Jr., chairman and CEO of Sanderson Farms, Inc. "That balance was reflected in a Georgia Dock whole bird price that, while lower on average than during last year's third fiscal quarter, remained strong during the current third fiscal quarter."
"Market prices for products from our plants that process a larger bird were mixed during the quarter when compared with last year's third fiscal quarter," Sanderson, Jr. added. "Bulk leg quarter prices came under pressure during last year's third fiscal quarter as a result of weak export demand due to bans on US poultry products related to the discovery of avian influenza in the US, a relatively strong US dollar and lower oil revenue in countries with oil-based economies."
According to Sanerson, Jr., market prices for bulk leg quarters were higher this year as all avian influenza-related import bans have been lifted except for China's. However, prices remain below historical averages as the other headwinds remain. Food service traffic and demand in the US remain static, and flat demand combined with additional industry production and higher domestic poultry supplies as a result of lower exports kept a lid on market prices for boneless breast meat during Sanderson's third fiscal quarter. But market prices for boneless breast meat have moved significantly higher during August, Sanderson, Jr. said.
According to Sanderson, compared with the third fiscal quarter of 2015, the average Georgia Dock price for whole chickens was approximately 3.6% lower, boneless breast meat prices were lower by approximately 12.7%, the average market price for bulk leg quarters increased approximately 29.6%, and jumbo wing prices were lower by 3.6%. The company's average feed cost per pound of poultry products processed decreased 1.76 cents per pound, or 6.5%, compared with the third quarter of fiscal 2015, and prices paid for corn and soybean meal, the company's primary feed ingredients, increased 2.5% and decreased 6.9%, respectively, compared with the third quarter of fiscal 2015.
"We continue to be pleased with progress at our new Palestine, Texas facilities," said Sanderson, Jr. "The plant is now operating at near full capacity, and the startup has been well executed. Construction continues on our new St. Pauls, North Carolina facilities, and we look forward to the opportunities the new facilities will provide to our shareholders, our customers and our employees when we begin processing at the new plant during our first fiscal quarter of 2017."