(By Balachander) Sanderson Farms Inc. (NASDAQ: SAFM) swung to a quarterly profit as sales jumped amid higher market prices for poultry products.
Earnings were $9.3 million or $0.41 per share for the fourth quarter ended Oct. 31, compared with a loss of $21.6 million or $0.97 per share in the year-ago quarter.
Sales grew 16 percent to $648.4 million.
Wall Street analysts, on average, expected SAFM to earn 32 cents a share on sales growth of 13.60 percent.
Like many other food processors, Sanderson Farms too has been hit by higher feed costs with macroeconomic conditions and continued high unemployment affecting consumers spending.
The Laurel, Mississippi-based company said boneless breast prices improved, averaging 11.6 percent amid soft food service demand.
Prices paid for corn and soybean meal, Sanderson Farms' key feed ingredients, rose 11.6 percent and 39.7 percent, respectively.
For the full year, Sanderson reported earnings of $2.35 a share on sales increase of 21 percent to $2.39 billion.
"Because we expect demand from our food service customers to remain soft until American consumers regain their confidence and the employment outlook brightens, and in light of continued high prices for grain and uncertainty regarding supply, we have instituted the additional two percent production cut we announced in August of 2012," said CEO Joe Sanderson.
The company currently plans to leave its production cut in place through fiscal 2013, Sanderson added.
In the preceding third quarter, SAFM earned $1.25 a share on sales of $625.0 million.
SAFM shares ended Monday's regular trading at $49.77. The stock has been trading in the 52-week range between $36.11 and $55.87.