August 7, 2008

 

US poultry processor Cagle's incurs US$3 million loss in latest quarter 

 
 

Cagle's, an Atlanta-based poultry processor, posted a net earnings loss of US$3 million, or 64 cents per diluted share, for the first quarter of fiscal year 2009 ended June 28, compared with a profit of US$1.3 million, or 33 cents per diluted share, for the same quarter last year.

 

Sales for the first quarter were US$76.9 million, up 7.4 percent from the previous year, the volume of meat sold rose of 13-percent pounds on-year.

 

Total cost of sales for the quarter increased 18.1 percent from the previous year, up to US$77.6 million from US$65.7 million.

 

Feed ingredient prices for broilers, which represented 39 percent of the total cost, increased 43 percent over the same quarter in 2008.

 

Cagle's expects high grain costs will continue to negatively impact operating margins, even as profits are expected to return as increased costs are passed on to customers.

 

Cagle's in March announced it would reduce production by 4 percent due to soaring feed costs. The vertically-integrated company slaughters 2 million birds a week.

 

The last two quarters has seen Cagle's gross operating profit down to about US$2 million, compared to US$7 million in the two quarters before that.

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