Sanderson Farms swings to Q2 profit
May 25, 2017
by Erica Shaffer
Sales were helped by strong poultry demand and low feed prices.
LAUREL, Miss. – Sanderson Farms Inc. reported net income of $66.9 million, or $2.94 per share, for the second quarter of fiscal 2017. Net income for same period a year ago was $47.6 million or $2.11 per share.
Net sales for the second quarter ended April 30, 2017 advanced 16 percent to $1,490.4 million compared with $1,297.3 million for the year-ago quarter.
Joe F. Sanderson Jr., chairman and CEO, attributed the results to strong demand for poultry products and what Sanderson called “benign” prices for corn and soybeans.
“The results for our second quarter of fiscal 2017 reflect benign feed costs, continued favorable demand for poultry products from retail grocery store customers, higher volume, and an improving export environment,” Sanderson said in a statement. “Our sales price per pound increased during the first half of this fiscal year compared with last year as market prices improved steadily through the second fiscal quarter. Poultry export market fundamentals improved, market demand for wings improved counter seasonally, and market prices for boneless breast meat improved significantly during the second half of April and have continued to move higher into May.
Sanderson added that net sales for the quarter reflected more pounds of poultry sold. “Our new Palestine, Texas, facility is running at full capacity and our St. Pauls, North Carolina, plant will reach 50 percent capacity next month,” he said. “Poultry pounds sold increased 11.5 percent during the quarter compared to last year’s second quarter.”
For the first six months of fiscal 2017, net sales were $1,490.4 million compared with $1,297.3 million for the same period a year ago. Net income for the first half of the year totaled $90.1 million, or $3.96 per share, compared with net income of $58.3 million, or $2.58 per share in the year-ago period.
Sanderson said grain prices are expected to remain “relatively benign” due to ample global supplies of corn and soybeans and with 2017 plantings of corn and soybeans close to average. Meanwhile, poultry production at Sanderson Farms is expected to increase.
“We expect our production during our third and fourth fiscal quarters of 2017 to be up 13.6 percent and 11.7 percent, respectively, compared to the same quarters of fiscal 2016,” Sanderson said. “The increase reflects new production at our new St. Pauls, North Carolina, and Palestine, Texas, complexes as well as the additional pounds we expect to process as a result of our previously announced agreement with House of Raeford Farms.”