Shares in US egg supplier Cal-Maine Foods fell over the festive period despite higher profits after second-quarter earnings missed analyst forecasts.
Cal-Maine reported net income of US$36.6m, or $0.76 per basic and per diluted share, for the second quarter to 29 November. The result compared to $26.1m, or $0.54 per basic and per diluted share, for the second quarter of the previous year.
However, according to reports, analysts polled by FactSet had forecast second-quarter earnings per share of $0.85.
Second-quarter net sales increased 6.9% to $378.6m.
Looking ahead, Cal-Maine chairman, president and CEO Dolph Baker said the company expected “favourable” results for the full year. However, he repeated recent comments about the possible impact of new egg production standards in California.
“We are very pleased with our performance through the first half of fiscal 2015 and look forward to the new opportunities ahead for Cal-Maine Foods. However, along with the rest of the egg industry, we will be closely monitoring the pending implementation of Proposition 2 and Assembly Bill 1437 related to egg production standards and sales in California,” Baker said on 23 December. “This legislation, scheduled to be effective January 1, 2015, could have a significant impact on egg production throughout the country.”
In 2008, California ruled egg-laying hens, calves for veal and pregnant pigs be confined only in ways that allow these animals to lie down, stand up, fully extend their limbs and turn around freely.
He added: “While it is too early to determine the outcome for our operations, we will continue to manage the aspects of our business we can control. As such, we remain focused on the key elements of our growth strategy: identify value-added acquisition opportunities, provide the right product mix for our customers with expanded sales of specialty eggs, and maximise our operating efficiencies. We believe these efforts will continue to produce favourable results for our customers and shareholders in fiscal 2015.”
In the first half of the company’s financial year, net income reached $64.3m, up sharply from the $34.9m booked a year earlier. Net sales rose 9.2% to $735.6m.
Cal-Maine reported its half-year results after the market closed on 23 December. That day, its shares closed at $44.18. At the close of trading on New Year’s Eve, Cal-Maine’s shares stood at $39.03.