By JACK WEATHERLY
Cal-Maine Foods Inc. reported on Monday that its net income for the fiscal first quarter was $12.4 million, or 26 per share, compared with a loss of $16 million, or 33 cents per share, a year earlier.
Net sales for the quarter that ended on Sept. 1 was $340.6 million, 29.6 percent increase ove $262.8 million.
Despite year-over-year improvement, Cal-Maine shares on the Nasdaq Stock Market took a sizeable hit on Monday and Tuesday.
Shares lost $3.30, or nearly 7 percent on Monday and $1.58, or 3.49 percent, in heavy midafternoon trading on Tuesday because the company did not perform up to analysts’ expectations.
Dolph Baker, chairman and chief executive officer of Cal-Maine, stated in a news release that sales benefited from higher selling prices and “consistent sales.”
“Our average customer selling price for shell eggs was up 28.5 percent compared with the first quarter of fiscal 2018,” Baker said. “Food service demand remained steady and year-to-date shell egg exports were slightly higher than the same period last year. Although overall egg production growth has been modest, according to recent USDA reports, the number of chicks hatched has increased 11 percent since the beginning of calendar 2018, indicating future increases in laying hen numbers. Given these trends, the potential increase in the shell egg supply could create additional pricing pressure.”
Sales by the dozen of “specialty eggs, excluding co-pack sales, were up 9.7 percent over the same period last year. Specialty egg prices were steady for the first quarter of fiscal 2019, with the average customer selling price at approximately the same level as a year ago. Specialty egg revenue was 34.2 percent of our total shell egg revenue, compared with 39.6 percent for the first quarter of fiscal 2018, due to higher market prices for non-specialty eggs in the current period. We remain focused on providing our customers with a favorable product mix of healthy and affordable options including conventional, cage-free, nutritionally enhanced and organic eggs.
“We currently have additional capital projects underway to convert Cal-Maine Foods’ facilities to convertible/cage-free capacity and replace less efficient production. These projects are designed to offer the flexibility to produce conventional eggs or cage-free eggs, allowing us to more effectively manage our future product mix.
“For the first quarter of fiscal 2019, our farm production costs per dozen were up 7.3 percent, primarily due to increased feed costs. Our overall production was down 2 percent compared with a year ago, as we adjusted flock rotations to maximize production for the upcoming holiday season.
“Our feed costs per dozen were up 10.1 percent, due to the higher cost of feed ingredients, primarily soybean meal. Based on the USDA’s estimates for a record harvest for this year’s corn and soybean crops, we expect to have an ample supply of feed ingredients for fiscal 2019. However, grain prices have been volatile with the recently imposed international tariffs creating market uncertainty.”
For the first quarter of fiscal 2019, Cal-Maine Foods will pay a cash dividend of approximately 8.5 cents per share to holders of its common and Class A common stock.
The company, which is headquartered in Jackson, is the largest producer and distributor of fresh shell eggs in the United States.
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