February 26, 2014

Sanderson reports Q1 fiscal 2014 net income of US$28.9 million

 

 

Sanderson Farms, Inc. reported results for the first quarter of fiscal 2014 ended January 31, 2014, with net sales of US$584.9 million compared with US$595.8 million for the same period a year ago.

 

For the quarter, the Sanderson reported net income of US$28.9 million, or US$1.25 per share, compared with a net loss of US$6.9 million, or US$0.31 per share, for the first quarter of fiscal 2013.

 

The company also announced that its Board of Directors has extended to February 24, 2017, its stock repurchase programme approved February 16, 2012, to repurchase up to 1.0 million shares from time to time at prevailing prices in open market transactions or in negotiated purchases, subject to market conditions, share price and other considerations.

 

"Our results for the first quarter of fiscal 2014 marked a solid start to the fiscal year," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc.

 

According to Sanderson, market prices for poultry products were mixed during the first quarter of fiscal 2014 compared with the same period of fiscal 2013. A simple average of the Georgia dock price for whole chickens was approximately 6.5% higher in the company's first fiscal quarter compared with the same period in 2013, and currently stands near a record US$1.0450 per pound. Boneless breast meat prices during the quarter were approximately 4.3% lower than the prior-year period.

 

The average market price for bulk leg quarters decreased approximately 15.6 % for the quarter compared with the same period last year. Jumbo wing prices were lower by 40.7 % compared with last year's first fiscal quarter, down from the record high US$1.92 per pound the week before the Super Bowl last year. The company's average feed cost per pound of poultry products processed decreased 25.1% compared with the first quarter of fiscal 2013, and prices paid for corn and soymeal, the company's primary feed ingredients, decreased 38.8% and 12.8%, respectively, compared with the first quarter of fiscal 2013.

 

"We expect market conditions in the retail grocery store market to remain strong as chicken will compete once again during 2014 with high priced beef and pork," Sanderson added.

 

"The record corn crop harvested in the US last fall has taken pressure off the US and world corn stocks to use ratio for 2014, but a lower than expected carryout of corn at the end of the 2014 crop year estimated by the USDA in February has caused market prices for both corn and soymeal to move higher.

 

While broiler egg sets have been higher than the previous year's levels most every week since last August, the industry remains constrained by limited breeder stock supplies. As a result, the company does not expect a significant increase in domestic chicken production until the second half of calendar 2014 at the earliest.

 

Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and further processed and partially cooked chicken products.