Sanderson Farms Inc. ( SAFM ), a poultry
processing company, announced mixed results for the fiscal first
quarter 2013. The company reported a loss per share of 31 cents,
missing the Zacks Consensus Estimate of a loss per share of 7
cents. Moreover, the results narrowed compared with a loss of 36
cents in the year ago quarter. The results can be attributed to a
huge rise in the prices of grains that offset the increase in price
Revenue: In the reported quarter, sales inched
up 15.1% year over year to $595.8 million, due to growth in both
price and volume of poultry. Revenue also surpassed the Zacks
Consensus Estimate of $557.0.
Costs/Margins: For the quarter, cost of sales
for the quarter increased 14.9% year over year to $584.9 million,
due to an increase in the feed cost. Also, operating loss widened
to $9.7 million from $9.1 million in the year-ago quarter.
Balance Sheet: Exiting the quarter, Sanderson's
cash and cash equivalents stood at $23.8 million against $27.8,
reported in the preceding quarter. Long-term debt (net of current
portion) was recoded at $150.0, almost flat compared with the
quarter ended Oct 31, 2012.
Cash flow: Cash flow from operations was
recorded at $8.2 million in the fiscal first quarter 2013; up from
cash used in operations of $6.6 million in the year-ago period.
Capital expenditures in the reported quarter dropped to $11.5
million from $15.9 million in the year-ago quarter.
Outlook: Sanderson expects the demand of
poultry to go up in the coming quarters subject to improvement in
the market conditions along with a rise in the costs of the
company. Corn and grain costs are likely to go up in the future as
well. Also, Sanderson expects its tax rate for the remainder of
fiscal 2013 to be roughly 35%.
The stock currently bears a Zacks Rank #1 (Strong Buy). Other
stocks worth a look in the industry are Hillshire Brands
Company ( HSH ) and Tyson
Foods Inc. ( TSN ), both holding a
Zacks Rank #1 (Strong Buy), whereas another stock, Hormel
Foods Corporation ( HRL ), holds a Zacks
Rank #2 (Buy).HORMEL FOODS CP (HRL): Free Stock Analysis
ReportHILLSHIRE BRAND (HSH): Free Stock Analysis
ReportSANDERSON FARMS (SAFM): Free Stock Analysis
ReportTYSON FOODS A (TSN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment