Cal-Maine Foods Q2 Profit Surges, Beats Estimates

(RTTNews) - Shell eggs producer Cal-Maine Foods, Inc. (CALM) Monday reported a sharp increase in second-quarter profit, reflecting continued growth in sales and improved volumes driven by favorable egg markets. Earnings per share beat analysts' expectations.

The company said its recent-quarter results reflected additional volumes related to purchase of commercial egg assets of Maxim Production Co., Inc., which was completed on November 15, 2012.

Cal-Maine noted that its specialty egg sales continued to trend higher, accounting for 16.4 percent of dozens sold and 23.7 percent of total shell egg sales revenue for the quarter, an increase from 22.9 percent reported last year. Maxim contributed to the 6.2 percent growth in dozens sold during the quarter.

Average selling prices improved 1 percent from last year to $1.340 per dozen. According to the company, specialty egg prices, increased 4.1 percent from the prior year. Specialty egg prices are typically higher and less cyclical than regular egg prices, it said.

Dolph Baker, chairman, president and chief executive officer of the company said, "Specialty eggs are an important area of focus for Cal-Maine Food's growth strategy as they continue to gain popularity with consumers who are looking for alternatives and willing to pay for premium products."

Feed costs were 15 percent lower than the year-ago period at $0.486 per dozen. The firm expects the feed costs to remain near current levels, but believes that prices of corn and soybean meal, its principal feed ingredients, will remain volatile for the remainder of the fiscal year.

For the second-quarter, the company posted net income of $26.11 million or $1.08 per share, higher than $14.29 million or $0.60 per share in the previous year.

On average, two analysts polled by Thomson Reuters expected earnings per share of $1.05 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter grew 8 percent to $354.28 million from $328.87 million in the same quarter in fiscal 2013. Excluding the acquisition, net sales for the second quarter of fiscal 2014 were $323.4 million, an increase of 1.6 percent from the previous year.

In addition, Cal-Maine Foods said it will pay second-quarter cash dividend of about $0.361 per share to holders of its common and Class A common stock. The dividend, to shareholders of record on January 29, 2014, is payable on February 3, 2014.

CALM closed Fridays regular trading at $60.25 on the Nasdaq.