Cal-Maine Foods' fiscal Q3 net income down 3% to US$33.6M on higher feed costs, but revenue up 1% to US$274.7M as consumer demand for eggs remained strong in the December-to-February period
March 28, 2011
– Cal-Maine Foods Inc. said Monday that consumer demand for eggs remained strong in the December-to-February period, but its net income dipped 3 percent as higher feed costs offset better sales.
The nation's biggest egg seller and distributor said feed costs rose 5.7 cents per dozen eggs on higher overall grain prices, particularly for corn. President and CEO Dolph Baker said in a statement that the company expects grain prices to continue on this path for the rest of the fiscal year and beyond.
Despite the higher feed costs, results still easily topped Wall Street estimates, sending shares up $2.11, or nearly 8 percent, to $29.93 in morning trading. While shell egg prices dropped slightly, the company sold more specialty eggs, which have a higher selling price. Cal-Maine sells nutritionally enhanced, cage free, and organic eggs under the Egg-Land's Best, Farmhouse, and 4-Grain brands. Higher sales of these items offset the decline in average market prices, Baker said.
Net income for Cal-Maine's fiscal third quarter ended Feb. 26 slipped to $33.6 million, or $1.40 per share, from $34.5 million, or $1.45 per share, in the prior-year period. Revenue climbed 1 percent to $274.7 million from $271.2 million, with specialty eggs accounting for 23.5 percent of total revenue.
On average, analysts had expected net income of $1.22 per share on revenue of $230.3 million, according to FactSet.
Cal-Maine, based in Jackson, Miss., said it will pay a third-quarter dividend of 47 cents per share on May 12 to shareholders of record on April 27. That's up from about 21.2 cents in the previous quarter.
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