May 23, 2008

Sanderson Farms reports US$6 million profits in Q2

Sanderson Farms' profit in the second quarter reached US$6.2 million, exceeding Wall Street expectations.

The profit was in spite of sky-high feed grain costs, while revenue rose 20 percent to US$433.9 million from US$360.5 million.

Analysts had initially expected a loss of 7 percent per share on revenue of US$435.3 million.

The price of corn and soymeal, the company's main feed ingredients, increased by 28 percent and 47 percent from a year ago, while expenses jumped 34 percent to US$423.4 million.

Overall market prices for poultry products were mixed in the second quarters. The price for bulk leg quarters were up 3.9 percent on-year but boneless breast meat prices dropped 10.1 percent.

Although the company earned in profits, but it's a sharp drop compared to the second quarter of 2007 when they made US$26.9 million.

Sanderson Farms expects feed grain costs to remain high at least through fiscal 2009.