August 26, 2011
Sanderson Farms reports Q3 revenue loss
Sanderson Farms Inc.'s fiscal Q3 ended July 31 suffered a net loss of US$55.7 million, or US$2.51/share, compared with a net income of US$36.1 million, or US$1.55/share, for the same period last year.
Its net loss for the first nine months of fiscal 2011 totalled US$105.5 million, or US$4.77 per share, compared with net income of US$87.0 million, or US$3.96 per share, for the first nine months of last year.
Net sales for the third quarter were US$511.2 million compared with US$489.1 million for the same period a year ago. Net sales for the first nine months of fiscal 2011 were US$1,418.2 million compared with US$1,396.3 million for the first nine months of fiscal 2010.
"Sanderson Farms' financial results for the third quarter of fiscal 2011 reflect difficult market conditions," said Joe Sanderson Jr., chairman and CEO. "Market prices for poultry products were significantly lower than last year's third quarter. While retail grocery store demand has remained steady, foodservice demand remains sluggish and will likely remain that way until the employment market gains traction and consumers regain their confidence and return to restaurants. We also incurred significantly higher costs for corn and soybean meal, our primary feed ingredients, compared with the same period a year ago."
Overall market prices for poultry products were lower in the third quarter of fiscal 2011 compared with prices in the third quarter of fiscal 2010. As measured by a simple average of the Georgia dock price for whole chickens, prices were relatively flat, showing a 0.3% decline compared with the third quarter of fiscal 2010.
Boneless breast meat prices weakened counter seasonally during the quarter, and averaged 22% lower than the prior-year period, and averaged 12.8% lower for the first nine months of the year compared with the prior year. Jumbo wing prices averaged US$0.78 per lb. for the third quarter of fiscal 2011, down 27.5% from the average of US$1.07 per lb. for the third quarter of fiscal 2010. The average quoted market price for bulk leg quarters increased approximately 24.3% for the quarter.
Cash prices for corn and soymeal delivered to the company increased 84.7% and 25.8%, respectively, compared with the third quarter a year ago. For the nine months ended July 31, 2011, the company's cash prices for corn increased 70.1% and soymeal increased 19.1% when compared to the nine months ended July 31, 2010.