Chicken processor Sanderson Farms posted net income of $10.5m for the fourth quarter of 2006, compared with $10.1m, after receiving Hurricane Katrina-related insurance proceeds.
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Net sales for the fourth quarter were US$291.7m compared with $262.5m for the same period a year ago.
Sanderson said that net income for the quarter included other income of $3.6m in insurance proceeds resulting from the company’s claim for business interruption losses caused by Hurricane Katrina.
The company received $6.8m during the quarter from its insurance carriers in final settlement of its claim, with the amount not recognised as other income used to offset previously recorded hurricane receivables.
The poultry firm said that net sales for the full 2006 financial year were $1.048bn compared with $1.053bn for 2005.
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By GlobalDataNet loss for the year totalled $11.50m, or $0.57 per diluted share, compared with net income of $70.6m, or $3.51 per diluted share, for last year.
“Our fourth quarter performance reflects an improvement in market prices for poultry products over the first half of fiscal 2006,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms. “Overall, we are pleased with our results during the quarter. While we benefited from stronger market prices during the first half of our fourth fiscal quarter compared to earlier in the year, prices remained below last year’s fourth quarter and have continued to weaken through the fall months. Average market prices for poultry products continue to be lower than a year ago.”
The company said that its construction of a new Waco, Texas, facility was underway and moving forward to schedule.
“Prices for feed grains continue to trend upward, and the company’s costs for feed grains will be materially higher during fiscal 2007 than during fiscal 2006. On the other hand, leading indictors of chicken production support consensus estimates of modest growth in poultry supplies for calendar 2007. Regardless of market conditions, however, we are focused on managing Sanderson Farms for the long term,” added Sanderson.
