US - A decline in sales and income for its third fiscal quarter has been reported by Sanderson Farms, which according to its website is America's third largest poultry producer.
Sanderson Farms, Inc. (NASDAQ: SAFM) was reporting its results for the third fiscal quarter and the nine months ended July 31, 2015.
Net sales for the third quarter of fiscal 2015 were $739.9 million compared with $768.4 million for the same period a year ago.
For the quarter, the company reported net income of $50.9 million, or $2.27 per share, compared with net income of $76.1 million, or $3.30 per share, for the third quarter of fiscal 2014.
Net sales for the first nine months of fiscal 2015 were $2,123.9 million compared with $2,014.0 million for the first nine months of fiscal 2014.
Net income for the first nine months of fiscal 2015 totaled $188.6 million, or $8.28 per share, compared with net income of $155.9 million, or $6.76 per share, for the first nine months of last year.
"Sanderson Farms' financial results for the third quarter of fiscal 2015 reflect continued good demand for fresh chicken at retail grocery stores, which demand was reflected in a Georgia dock whole bird price that remained near record levels during the quarter," said Joe F. Sanderson Jr., chairman and chief executive officer of Sanderson Farms, Inc.
"However, market prices for most products produced at our big bird deboning plants were significantly lower during the quarter when compared to last year's third fiscal quarter.
"Bulk leg quarter prices remain under pressure as a result of weak export demand affected by export bans related to the discovery of avian influenza in the United States, a relatively strong United States dollar and lower oil revenue in countries with oil-based economies.
"While food service traffic and demand in the United States continue to improve, that demand was not enough to keep pace with additional industry production combined with higher domestic supplies resulting from lower exports. As a result, market prices for boneless breast meat remained under pressure during the quarter."
According to Mr Sanderson, compared with the third fiscal quarter of 2014, the average Georgia dock price for whole chickens was approximately 4.5 per cent higher, boneless breast meat prices were lower by approximately 25.4 per cent, the average market price for bulk leg quarters decreased approximately 47.8 per cent, and jumbo wing prices were higher by 29.5 per cent.
The company's average feed cost per pound of poultry products processed decreased 8.9 cents per pound, or 24.7 per cent, compared with the third quarter of fiscal 2014.
Prices paid for corn and soybean meal, the company's primary feed ingredients, decreased 13.2 per cent and 34.5 per cent, respectively, compared with the third quarter of fiscal 2014.
"We are pleased with progress at our new Palestine, Texas, facilities," said Mr Sanderson, on a positive note.
"The plant is now moving to fifty per cent capacity, and we are on schedule to increase production at the plant again in January 2016. We expect to reach full production during the second fiscal quarter of 2016.
"We also broke ground on our new St Pauls, North Carolina, facilities in July, and we look forward to the opportunities the new facilities will provide to our shareholders, our customers and our employees."
You can view the full results report by clicking here.
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