A jump in feed costs has pushed US poultry group Sanderson Farms in its fiscal second quarter and in the first half of its financial year.
The company today (24 May) reported a net loss of US$16.3m for the three months to the end of April – compared to net income of $35.1m a year earlier.
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The second-quarter loss included a $6m charge “to reduce the value of live inventory from cost to market”.
Despite the loss, Sanderson shares were up 2% at $46.91 at 09:34 ET today.
Sanderson also booked a half-year loss. The company’s losses over the first six months of its financial year reached $49.8m, against net income of $50.9m in the previous year.
Reflecting on Sanderson’s second quarter, chairman and CEO Joe Sanderson said the company’s results were affected by the “significant increase in our feed costs”.
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By GlobalData“Feed costs in flocks sold increased 41.3% compared to last year’s second fiscal quarter, and we expect grain prices to remain high and volatile for at least the rest of this year, as there is no margin for error with the 2011 grain crop,” Mr Sanderson said.
The chief executive said market conditions remain “challenging” but said the company’s operating performance in the second quarter was “solid”.
Second-quarter net sales reached $479.3m, down from $487.1m a year earlier. Half-year net sales were $907.1m, compared to $907.2m a year ago.
Mr Sanderson said second-quarter volumes were “slightly higher” but the fall in sales was due to “lower average sales prices of chicken”.
