High feed costs continued to pinch profit for Sanderson Farms, Inc. during the second quarter of fiscal 2013, but a higher demand for poultry products helped elevate sales.
For the second quarter ended April 30, the company had net income of $24,371,000, equal to $1.06 per share on the common stock, which compared with $23,865,000, or $1.04 per share, during the same quarter of the prior year.
Sales were $621.2 million during the quarter, compared with $595 million for the same period a year before.
“The results for our second quarter of fiscal 2013 reflect improved market conditions driven primarily by an overall increase in demand for poultry products,” said Joe F. Sanderson Jr., chairman and chief executive officer. “Our net sales were 4.4% higher compared with the second quarter of fiscal 2012, reflecting higher average sales prices of chicken. While our volumes reflect the production cuts we put in place last fall, demand for chicken remains strong from our retail grocery store and export customers. In addition, while customer traffic through food service establishments remains challenged by macroeconomic factors, several new chicken items on quick-serve menus and chicken promotions in casual dining restaurants, coupled with relatively high priced beef, contributed to better market prices during the quarter for products produced at our food service plants.”
During the quarter, prices paid for corn and soybean meal increased nearly 16% and 37%, respectively, compared with the same period of the previous year.
“Looking ahead, we are reasonably optimistic as we head into the summer months and what is typically a period of better demand for chicken,” Mr. Sanderson said. “While grain costs remain above historical levels, demand for chicken products is strong. Weekly broiler egg sets continue to run slightly above last year’s numbers, but breeder placements remain lower and it appears the reduced size of the breeder flock will constrain production over the short term despite higher industry returns. While macroeconomic conditions have continued to affect consumer behavior, market prices for boneless breast meat sold to our food service customers improved through April and May, and market prices for retail grocery store products have also moved higher. Regardless of market conditions, however, we will maintain our focus on our operating performance and sales execution.”
Income for the first half of 2013 was $12,428,000, or 76c per share, up from $15,876,000, or 69c per share, during the same period of the prior year. Sales during the six-month period were $1,216,955,000, compared with $1,112,872,000 during the same period a year before.
