LAUREL, Miss. – Weak demand for chicken and two hurricanes in the same quarter impacted fourth-quarter financial results at Sanderson Farms Inc.
For the three months ended Oct. 31, 2018, the company reported a net loss of $43.2 million, or $1.95 per share, in the fourth quarter of fiscal 2018. This compares to net income of $72.9 million, or $3.20 per share, for the fourth quarter of fiscal 2017.
Net sales for the quarter were $798.1 million compared with $919.9 million for the same period a year ago.
Results for the quarter and the fiscal year reflect a charge of $9.6 million, or approximately $0.32 per share net of income taxes, in addition to inefficiencies caused by hurricanes Michael and Florence, the company said.
“The fourth quarter marked the end of a challenging year for Sanderson Farms,” said Joe F. Sanderson, Jr., chairman and CEO of Sanderson Farms. “Market conditions weakened significantly during our fourth fiscal quarter of 2018, as market prices declined after Labor Day, reflecting weak demand for products produced for the food service market at our plants that process a larger bird. The decrease in demand and resulting weak market prices were exacerbated by hurricane disruptions.
“For the fiscal year, we reported record volume of poultry products sold of 4.44 billion lbs., compared to 4.22 billion lbs. in fiscal 2017. Grain prices were slightly higher during fiscal 2018 compared with prices paid in fiscal 2017; however, feed costs in processed flocks were higher by only 1.3 percent per lb., as higher prices paid for feed grain were partially offset by improved live bird performance.”
Net income for fiscal 2018 totaled $61.4 million, or $2.70 per share, compared with $279.7 million, or $12.30 per share reported in fiscal 2017.
Net sales for the fiscal year were $3.236 billion compared with $3.342 billion for fiscal 2017.
Sanderson said overall realized prices for poultry products declined 9.2 percent in 2018 compared with a year ago and were significantly lower during the fourth quarter of 2018. Prices for boneless breast meat averaged 26.1 percent lower in the fourth quarter compared to the prior-year period, while jumbo wing market prices averaged $1.46 per lb. Sanderson said the average market price for bulk leg quarters fell approximately 24.8 percent during the fourth quarter.
Cash prices for corn during the fourth quarter eased 1.2 percent, while soybean meal cash prices were 1.9 percent higher.