(Sanderson story updated with additional analyst commentary.)
LAUREL, Miss. (TheStreet) -- Poultry processor Sanderson Farms (SAFM) - Get Report watched third-quarter profits slim down to $36.1 million from $43 million a year earlier, as "extreme" heat across the company's production areas hurt the weight of livestock and led to fewer pounds of meat sold.

Also, market prices for poultry products fell during the quarter, offsetting the positive impact of lower grain costs. Sanderson Farms's management said grocery store demand remained strong during the quarter, but food service demand was sluggish. The company believes that this sluggishness will likely remain until the job market improves and more consumers return to restaurants.

Sanderson Farms reported third-quarter net income of $1.55 per share compared with the average analyst estimate of $1.87 per share.

Net sales for the quarter fell 3.1% to $489.1 million compared with $504.8 million the same period a year ago, below the consensus target of $518.57 million.

Shares of Sanderson Farms stock fell by more than 2% to $42.15 shortly after the market open on the earnings news. However, the stock soon rebounded after the company announced during an earnings call that it's exporting chicken products to Russia again. Russia had banned U.S. chicken products for months because of concerns about the safety of chlorine rinses used for disinfecting the meat.

The revelation led Sanderson's stock to close Monday's trading session up 6.1% at $45.80.

In a research note following the company's earnings report, BMO Capital analyst Kenneth Zaslow observed that investors generally profit from Sanderson Farms by investing in the stock during the fall. Purchasing Sanderson shares in September and selling in May has produced a 30% return over the last decade with only two years showing losses -- one during the tech boom in 2000 and the other in 2006 amid the bird flu epidemic.

"Excluding 2000 and 2006, SAFM appreciated an average of 40%-plus from September to May," Zaslow told clients.

Sanderson executives have expressed much enthusiasm about the reopening of the Russian market, which is a top market for chicken products. "The Russian business will likely continue to have premium prices," Stephens analyst Farha Aslam wrote in a research note. She said Russian market concerns had been a major overhang on protein stocks for weeks.

Overall, the supply of protein remains generally tight, she said.

BMO's Zaslow expects that "higher chicken prices (i.e., balanced supply and demand in 2011, the eventual reopening of the Russian border) likely will more than offset the recent increase in feed costs (assuming normal weather patterns, we expect feed costs to fall from current peaks in 2011)."

In a note, Deutsche Bank analysts Christina McGlone and Nicholas Cavallo told clients that the continuation of chicken exports to Russia is "key from here," given the accumulation of chicken leg quarter inventories in U.S. cold storage and at the Baltics port.

Through Monday's close, Sanderson Farms' shares were up about 2.4% year-to-date. The session's volume of 1.9 million was roughly five times the issue's trailing three-month average daily churn of around 320,000.

-- Reported by Andrea Tse in New York.

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