Sanderson Farms has reported a growth in profits for the first nine months of the year

Sanderson Farms has reported a growth in profits for the first nine months of the year

US poultry producer Sanderson Farms reported an increase in sales during its third quarter, but despite profit growth, results fell short of analyst expectations.

Lower chicken processing volume and higher selling, general and admin costs meant the firm missed analyst expectations of US$3.77 earnings per share. It posted earnings of $3.30 per share or $76.1m. Profit for the same period last year was $67m.

The firm's sales were helped by "favourable market conditions", reaching $768m from $738m for the same period last year. Operating profit rose to $115m from $104m. 

For the first nine months of the year, Sanderson saw net profit almost double from US$85m to $156m. Operating profit was up to $239m compared with $134m. Sales increased to $2.01bn from $1.95bn.

Shares in Sanderson fell in afternoon trade yesterday (26 August) by 6.3% to US$89.09 but recovered slightly today, increasing to $92.14 by 16:00 BST.

BB&T Capital Markets analyst Brett Hundley lowered his earnings per share estimate for 2014 from $10.89 to $9.65.

"We expect the industry to over-produce, relative to demand, this fall. Eggs are already available on the market, and margins have remained elevated recently. Although supply will increase into 2015 on aforementioned factors (with a subsequent price decline), we expect margins to remain relatively favourable," he said.