Cal-Maine Foods Inc.
) second-quarter 2013 earnings of 60 cents per share missed the
Zacks Consensus Estimate of 99 cents. Earnings also deteriorated
sharply from the year-ago level of 97 cents. The year-over-year
decline in earnings was due to lower profit as a result of
increased input costs.
BRF-BRASIL FOOD (BRFS): Free Stock Analysis
CAL-MAINE FOODS (CALM): Free Stock Analysis
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Inside the Headline Numbers
Total revenue in the quarter under review grew 13.3% year over
year to $328.9 million, surpassing the Zacks Consensus Estimate
of $322.0 million. The upswing resulted from strong demand for
eggs as well as higher average selling prices.
The largest U.S. producer and distributor of fresh-shell eggs
stated that net average selling prices for shell eggs increased
4.0% year over year. Specialty eggs, which have higher and less
cyclical selling prices, continued to see improved sales and
accounted for 16.4% of total dozens sold. Around 22.9% of total
shell egg sales revenue came from Specialty eggs in the quarter.
Specialty egg prices were up 4.8% year over year.
Gross profit declined 16.6% from the prior-year quarter to $51.3
million, mainly due to the hike in feed cost. The drought in the
Midwest growing region over the summer months has caused a spike
in grain costs to a record level.
During the quarter, feed cost climbed 23.4% to nearly 57 cents
per dozen on the back of higher corn and soybean prices.
Cal-Maine ended the quarter with cash and short-term investment
of $163.1 million and long-term debt (less current maturities) of
Jackson, Mississippi-based Cal-Maine, which engages in
production, grading, packaging, marketing and distribution of
shell eggs, remains skeptic about the profitability environment
in rest of fiscal 2013. We are also supportive of management's
The company has been struggling with input cost pressure for some
time. Feed costs continued to hurt the company's production
costs. Management predicts feed costs to remain high and volatile
for the rest of the fiscal year.
However, revenue growth momentum continued on strong retail
demand. Further, demand for eggs at the retail level should surge
during the fourth quarter owing to the holiday season. The
company's inorganic expansion also remains steady.
Cal-Maine Foods, along with its peer
BRF - Brasil Foods S.A.
), currently carries a Zacks #3 Rank (short-term Hold rating).