Sanderson Farms Q4 Results Top Estimates

(RTTNews) - Poultry processor Sanderson Farms, Inc. (SAFM) reported Thursday a profit for the fourth quarter that more than doubled from last year, reflecting lower costs and expenses as well as revenue growth amid improved demand and higher poultry market prices. Both earnings per share and quarterly net sales also topped analysts' expectations.

"The fourth quarter of fiscal 2014 marked a strong finish to a successful year for Sanderson Farms," Chairman and CEO Joe Sanderson, Jr. said in a statement.

The Laurel, Mississippi-based company reported net income of $93.11 million or $4.04 per share for the fourth quarter, higher than $45.27 million or $1.97 per share in the prior-year quarter.

On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $4.01 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter improved to $760.85 million from $727.06 million in the same quarter last year, and topped six Wall Street analysts' consensus estimate of $758.28 million.

According to Sanderson, overall market prices for poultry products were higher in the fourth quarter from last year. As measured by a simple average of the Georgia dock price for whole chickens, prices increased about 7.1 percent. The higher Georgia Dock price reflects good retail grocery store demand.

The company noted that boneless breast meat prices averaged 15.8 percent higher in the fourth quarter and Jumbo wing prices averaged 5.2 percent higher.

Cash prices for corn delivered to the company decreased 23.2 percent, and the price for soybean meal delivered to the company declined 10.5 percent from the year-ago quarter.

Total costs and expenses declined to $618.32 million from $655.28 million in the year-ago quarter.

The company said it is pleased with its profitability during fiscal 2014, which allowed it to fund planned expansion in Palestine, Texas, further reduce outstanding debt, strengthen balance sheet, reward shareholders with a special dividend and increase regular quarterly dividend rate.

"We are well positioned to continue our growth strategy as we begin operations at our new poultry complex in Palestine, Texas, in February 2015. The pounds produced in Palestine, at full production, will represent a 16 percent increase in our capacity," Sanderson added.

SAFM closed Wednesday's regular trading session at $87.41, up $0.80 on a volume of 0.71 million shares.