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Sanderson Farms Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 29, 2012 07:19AM

Sanderson Farms Inc. (SAFM) filed Quarterly Report for the period ended 2012-04-30. Sanderson Farms has a market cap of $1.21 billion; its shares were traded at around $54.31 with and P/S ratio of 0.6. The dividend yield of Sanderson Farms stocks is 1.3%.



Highlight of Business Operations:

Net sales for the second quarter ended April 30, 2012 were $595.0 million as compared to $479.3 million for the second quarter ended April 30, 2011, an increase of $115.7 million or 24.1%. Net sales of poultry products for the second quarter ended April 30, 2012 and April 30, 2011 were $572.9 million and $451.3 million, respectively, an increase of $121.6 million or 26.9%. The increase in net sales of poultry products resulted from a 14.5% increase in the average sales price of poultry products sold and a 10.8% increase in the pounds of poultry products sold. During the second quarter of fiscal 2012 the Company sold 743.3 million pounds of poultry products, up from 670.7 million pounds during the second quarter of fiscal 2011. The additional pounds of poultry products sold resulted from a 5.2% increase in the number of chickens sold, primarily attributable to the new Kinston complex, which began initial operation during the first quarter of fiscal 2011 and was closer to full capacity during the second quarter of fiscal 2012. The complex sold 78.2 million pounds, or 10.5% of the total poultry pounds sold by the Company in the second quarter of fiscal 2012, up from 25.2 million pounds of poultry, or 3.8 % of the total poultry pounds sold during the second quarter of fiscal 2011. Overall market prices for poultry products increased during the second quarter of fiscal 2012 as compared to the same quarter of fiscal 2011 primarily as a result of a decrease in the supply of poultry products. Urner Barry market prices increased for boneless breast meat, bulk leg quarters, tenders and jumbo wings during the second quarter of fiscal 2012 as compared to the second quarter of fiscal 2011 by 2.3%, 22.4%, 15.4% and 121.5%, respectively. The average market price for Georgia Dock whole birds also showed improvement and increased by approximately 7.5%. Net sales of prepared chicken products for the three months ended April 30, 2012 and 2011 were $22.1 million and $28.0 million, respectively, or a decrease of 21.0%, resulting from a 4.3% decrease in the average sales price of prepared chicken products sold and a 17.5% decrease in the pounds of prepared chicken products sold from 14.1 million pounds sold during the second quarter of fiscal 2011 to 11.6 million pounds sold during the second quarter of fiscal 2012.

Net sales for the first six months of fiscal 2012 were $1,112.9 million as compared to $907.1 million for the first six months of fiscal 2011, an increase of $205.8 million or 22.7%. Net sales of poultry products for the first six months of fiscal 2012 and fiscal 2011 were $1,068.9 million and $853.8 million, respectively, an increase of $215.1 million or 25.2%. The increase in net sales of poultry products resulted from a 15.3% increase in the average sales price of poultry products sold and a 8.5% increase in the pounds of poultry products sold. During the first six months of

fiscal 2012 the Company sold 1,412.5 million pounds of poultry products, up from 1,301.4 million pounds during the first six months of fiscal 2011. The additional pounds of poultry products sold resulted from a 6.2% increase in the number of chickens sold, primarily attributable to the new Kinston complex, which began initial operation during the first quarter of fiscal 2011 and was closer to full capacity during the first six months of fiscal 2012. The complex sold 144.6 million pounds, or 10.2% of the total poultry pounds sold by the Company in the first six months of fiscal 2012, up from 33.6 million pounds of poultry, or 2.6 % of the total poultry pounds sold during the first six months of fiscal 2011. Overall market prices for poultry products increased during the first six months of fiscal 2012 as compared to the same period during fiscal 2011, primarily as a result of a decrease in the supply of poultry products. Urner Barry market prices increased for boneless breast meat, bulk leg quarters, tenders and jumbo wings during the first six months of fiscal 2012 compared to fiscal 2011 by 4.9%, 31.1%, 19.1% and 76.6%, respectively. The average market price for Georgia Dock whole birds also showed improvement and increased by approximately 6.4%. Net sales of prepared chicken products for the first six months of fiscal 2012 and 2011 were $44.0 million and $53.3 million, respectively, or a decrease of 17.5%, resulting from a 4.7% decrease in the average sales price of prepared chicken products sold and a 13.4% decrease in the pounds of prepared chicken products sold from 27.1 million pounds sold during the first six months of fiscal 2011 to 23.4 million pounds sold during the first six months of fiscal 2012.

Cost of sales for the second quarter of fiscal 2012 was $535.9 million as compared to $479.4 million during the second quarter of fiscal 2011, an increase of $56.5 million or 11.8%. Cost of sales of poultry products sold during the second quarter of fiscal 2012 as compared to the second quarter of fiscal 2011 were $514.4 million and $454.0 million, respectively, an increase of $60.4 million or approximately 13.3%. As illustrated in the table below, which excludes the impact of the $22.3 million live inventory adjustment at January 31, 2011 for comparative purposes, the increase in the cost of sales of poultry products sold resulted from a 10.8% increase in the pounds of poultry products sold and an increase in all other cost of sales of poultry products of $.0198 per pound, offset by a decrease in the cost of feed in broiler flocks sold of $0.0378 per pound.

Cost of sales for the six months ended April 30, 2012 was $1,044.9 million as compared to $938.3 million during the same period during fiscal 2011, an increase of $106.6 million or 11.4%. Cost of sales of poultry products sold for the six months ended April 30, 2012 and April 30, 2011 were $1,002.9 million and $890.5 million, respectively, an increase of $112.4 million or approximately 12.6%. As illustrated in the table below, the increase in the cost of sales of poultry products sold resulted from an increase of 8.5% in the pounds of poultry products sold and increases in feed costs and all other cost of sales per pound of $0.0078 and $0.0180, respectively.

Read the The complete Report



Stocks Discussed: SAFM,
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