Sanderson Farms reports profit growth, but pricing questions remain
- Sanderson Farms posted net income of $76 million, or $3.36 a share, compared with $27.4 million, or $1.22 a share, one year ago, The Wall Street Journal reported.
- Sales increased 16% to $790.8 million over $679.6 million in the same quarter last year, though that total missed analysts' estimates.
- The company said whole chicken prices fell 4%, while other chicken sub-segments saw price increases, including boneless breast meat (7.4%), jumbo wings (9.5%) and bulk leg quarters (46%), which Sanderson attributed to increased export demand.
Sanderson Farms has profited from higher prices on many of its chicken products, but the company is also embroiled in a scandal involving an industry self-reported pricing index, the Georgia Dock. The U.S. Department of Agriculture no longer includes this index in its poultry pricing reports, and the Georgia Department of Agriculture has also stopped publishing the index in the past month.
Sanderson Farms can enjoy the profitability and higher sales figures that higher prices can afford the company now, but it's unclear how significantly the company might be impacted by the Georgia Dock controversy and the impending lawsuit surrounding it.
Sanderson Farm's shares jumped 5.3% to $94 in premarket trading.
- The Wall Street Journal Sanderson Farms Profit Climbs, Driven by Improving Margins
- MarketWatch Sanderson Farms beats profit and sales expectations as chicken prices rise