Sanderson Farms, Inc. (NASDAQ: SAFM) today reported results for its second fiscal quarter and six months ended April 30, 2012.
Net sales for the second quarter of fiscal 2012 were $595.0 million compared with $479.3 million for the same period a year ago. For the quarter, net income was $23.9 million, or $1.04 per share, compared with a net loss of $16.3 million, or $0.74 per share, for the second quarter of fiscal 2011.
Net sales for the first six months of fiscal 2012 were $1,112.9 million compared with $907.1 million for the same period of fiscal 2011. Net income for the first half of the year totaled $15.9 million, or $0.69 per share, compared with a net loss of $49.8 million, or $2.25 per share, for the first six months of last year.
“The results for our second quarter of fiscal 2012 reflect improved market conditions driven primarily by a decrease in the supply of poultry products," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Our net sales were 24.1 percent higher than during the second quarter of fiscal 2011, reflecting increased production and higher average sales prices of chicken. We sold approximately 10.8 percent more pounds of poultry products during the quarter as a result of increased production at our Kinston, North Carolina facility. This increase was partially offset by our previously announced four percent production cut at our other facilities. Demand for chicken remains steady from retail grocery store and export customers. However, demand from our casual dining customers remains soft, and we expect this trend will continue with macroeconomic concerns and continued high unemployment affecting consumers’ spending decisions.
“Our profitability for the second quarter continued to be adversely affected by relatively high feed costs. Feed costs in flocks sold decreased 9.8 percent compared to last year’s second fiscal quarter, but remained high relative to historical costs. Because of the tight supply of both corn and soybeans, we expect grain prices to remain high and volatile at least until markets get some visibility on the quantity and quality of this year’s corn and soybean crops. While there is some degree of optimism regarding the 2012 corn crop fueled primarily by the rapid planting progress this spring and the large number of acres expected to be planted, there is no margin for error with this year’s crop. Until the crop is harvested, we expect to pay higher prices, at least over the short term, for both corn and soybean meal,” added Sanderson.