LAUREL, MISS. — Fourth-quarter net income dropped 70% at Sanderson Farms Inc. on lower prices for chicken, the company said.
Net income for the quarter ended Oct. 31 was $27.4 million, equal to $1.22 per share on the common stock, compared with $93.1 million, or $4.04 per share, in the year-ago quarter. Revenues for the quarter dropped 11% to $679.6 million compared with $760.9 million a year ago.
The company said Georgia Dock prices for boneless breast meat were 29.5% lower in the fourth quarter compared with the prior-year period. For fiscal 2015, boneless prices were 15.4% lower when compared with fiscal 2014.
Jumbo wing prices declined 1.3% to $1.48 per lb during the fourth quarter, while the average market price for bulk leg quarters plummeted 53.3% for the quarter, and decreased approximately 31.5% for fiscal 2015. Sanderson said lower prices for dark meat reflect a significant decline in industry export volumes during the second half of fiscal 2015.
Declines partially were offset by lower prices for feed. Sanderson said cash prices for soybean meal were down 21.2%, while corn cash prices fell by 0.4%.
|Joe F. Sanderson, chairman and c.e.o. of Sanderson Farms|
“While conditions during the fourth quarter of fiscal 2015 deteriorated in the big bird deboning market, the quarter marked the end of another successful year for Sanderson Farms,” said Joe F. Sanderson Jr., chairman and chief executive officer.
Net sales for the year were $2,803 million compared with $2,775 million for fiscal 2014. Net income for fiscal 2015 totaled $216 million, or $9.52 per share, compared with net income of $249 million, or $10.80 per share, a year ago.
“We are pleased that our profitability during fiscal 2015 allowed us to fund our planned expansion in Palestine, Texas, further reduce outstanding debt, strengthen our balance sheet, and reward our shareholders with a special dividend,” Mr. Sanderson added. “We are well positioned to continue our growth strategy as we continue to move our new poultry complex in Palestine, Texas, to full production and continue construction of our newest complex in St. Pauls, North Carolina.“The pounds produced in Palestine and St. Pauls, at full production, will represent a 32% increase in our capacity.”