Sanderson Farms' earnings surge in Q4
LAUREL, Miss. – Fourth quarter earnings for Sanderson Farms, Inc., soared on higher prices for poultry and lower cash prices for corn and soybeans in the quarter.
Net income for the three months ended Oct. 31 was 45.3 million, or $1.97 per share, compared to net income of $9.3 million, or 41 cents per share in the fourth quarter of 2012. Revenues for the quarter climbed to $727.1 million compared to $648.4 million in the year-ago quarter.
"The fourth quarter of fiscal 2013 marked a strong finish to a successful year for Sanderson Farms and the poultry industry," said Joe F. Sanderson, Jr., chairman and CEO of Sanderson Farms. "We reported record annual sales of $2.683 billion, a 12.4 percent increase over fiscal 2012. While poultry markets improved compared to fiscal 2012, grain prices remained near record high levels during much of fiscal 2013 before moderating during the fourth quarter on optimism surrounding the current year's grain harvest. However, the improved poultry market prices more than offset the higher feed costs, and our margins improved significantly during fiscal 2013 compared to fiscal 2012. For the year, we sold 3.031 billion pounds of dressed poultry, another record, compared with 2.952 billion pounds in fiscal 2012."
Sanderson noted that overall market prices for poultry products were higher in the fourth quarter compared to a year ago, but declined significantly from peaks earlier in the year. Georgia dock prices for whole chickens were 10.9 percent higher in Sanderson's fourth quarter compared with the same period a year ago, and were higher by 10.4 percent for the fiscal year. The Georgia Dock whole bird price remained in record territory through all of fiscal 2013 and reflected steady demand for Sanderson's retail chill pack product.
Cash prices for corn and soybean meal increased during the year but declined 32.8 percent and 1.6 percent, respectively, during the fourth quarter compared with the fourth quarter a year ago. For the year, total feed costs in broiler flocks processed were 5.7 percent higher than fiscal 2012, Sanderson said.
"We are pleased that our profitability during fiscal 2013 allowed us to significantly reduce outstanding debt and strengthen our balance sheet," Sanderson added. "As a result, we are well positioned to continue our growth strategy, and we began construction of our new poultry complex in Palestine, Texas, in October. Operations at that new facility are scheduled to start in the first calendar quarter of 2015, and the pounds produced in Palestine, at full production, will represent a 16 percent increase in our capacity."