Cal-Maine Foods Q1 Profit Declines On Costs, Sales Up 17%

(RTTNews) - Shell eggs producer Cal-Maine Foods, Inc. (CALM) Monday reported a decline in first-quarter profit, citing an increase in production costs. However, sales climbed 17 percent, driven by higher volumes and rise in average selling prices. Looking ahead, the company said it is well positioned to capitalize on the growing demand for specialty eggs.

According to the firm, specialty eggs continued to gain in popularity with consumers and accounted for 16.2 percent of dozens sold and 24.6 percent of total shell egg sales for the first quarter. Average selling price of specialty eggs increased 5.5 percent from the prior year.

Meanwhile, market prices for grain remained high through the first quarter and feed costs advanced 3.4 cents per dozen or 6.7 percent, from the same quarter last year, the company said.

Cal-Maine, however, experienced favorable growing conditions this summer, which have improved the yield of corn and soybean crops in the current year. This has resulted a decline in prices from the previous high levels, and the firm expects to incur lower feed costs for the remainder of fiscal 2014.

In the first quarter, the company's net income declined to $8.76 million or $0.36 per share from $9.42 million or $0.39 per share in the previous year. On average, analysts polled by Thomson Reuters expected earnings per share of $0.36 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the 13 weeks ended August 31, 2013, climbed 17 percent to $319.53 million from $272.93 million in the preceding year.

Dolph Baker, chairman, president and chief executive officer of the company stated, "...These results reflect higher volumes and higher average selling prices compared with the first quarter last year."

In addition, the company said it will pay a quarterly cash dividend for the first quarter of about $0.068 per share to holders of its common and Class A common stock. The dividend is payable on November 14, 2013, to shareholders of record on October 30, 2013.

No dividend was paid for the fourth quarter of fiscal 2013, as the firm experienced a loss of $3.8 million or $0.16 per share in the quarter, due to previously disclosed settlement of a direct purchaser class claim against the company, which resulted in a one-time charge of $17 million or $0.71 per basic share, after tax.

CALM closed Friday's regular trading at $48.91 on the Nasdaq.