Sanderson Farms Earnings: Here’s Why Investors Like These Results

Sanderson Farms, Inc. (NASDAQ:SAFM) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 1.53%.

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Sanderson Farms, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 1.92% to $1.06 in the quarter versus EPS of $1.04 in the year-earlier quarter.

Revenue: Rose 4.39% to $621.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sanderson Farms, Inc. reported adjusted EPS income of $1.06 per share. By that measure, the company beat the mean analyst estimate of $0.71. It missed the average revenue estimate of $623.95 million.

Quoting Management: “The results for our second quarter of fiscal 2013 reflect improved market conditions driven primarily by an overall increase in demand for poultry products,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Our net sales were 4.4 percent higher compared with the second quarter of fiscal 2012, reflecting higher average sales prices of chicken. While our volumes reflect the production cuts we put in place last fall, demand for chicken remains strong from our retail grocery store and export customers. In addition, while customer traffic through food service establishments remains challenged by macroeconomic factors, several new chicken items on quick serve menus and chicken promotions in casual dining restaurants, coupled with relatively high priced beef, contributed to better market prices during the quarter for products produced at our food service plants.

Key Stats (on next page)…

Revenue decreased 0% from $0 in the previous quarter. EPS increased to $1.06 in the quarter versus EPS of $-0.31 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.12 to a profit $1.56. For the current year, the average estimate has moved up from a profit of $2.86 to a profit of $4.21 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)