Cal-Maine Foods Inc. (CALM, Financial) released its third-quarter financial results before the opening bell on March 30. Both earnings and revenue beat analysts’ projections.
By the numbers
The nation’s largest egg producer reported earnings of 28 cents per share in the third quarter, which reflected a decline of 65.85% over the past year. Revenue of $345.6 million fell 10% on a year-over-year basis. Analysts had predicted earnings of 17 cents per share on $338.08 millin in revenue.
Reflecting on the company’s performance, Chairman and CEO Dolph Baker said:
“Our results for the third quarter of fiscal 2020 reflect more challenging market conditions than we experienced for the same period last year. However, we were pleased with our ability to execute our strategy in this environment and return to profitability for the quarter.”
Quarter in details
For the quarter ended Feb. 29, 2020, the company sold 271.8 million dozen eggs, which was roughly in line with the prior-year quarter. The net average selling price, however, was down from the prior-year period at $1.236 per dozen.
“For the third quarter, specialty eggs, excluding co-pack sales, were $117.7 million, accounting for 35% of our sales revenue, compared with $131.1 million, or 35% percent of sales revenue, in the third quarter of fiscal 2019," Baker said. "Average pricing for specialty eggs was down by 3.4% to $1.89 per dozen in the third quarter compared to the prior-year third quarter. Specialty dozens sold were also down 7.1%, as sales of specialty dozens were negatively affected by low conventional egg prices.”
A mismatch between egg demand and supply unfavourably affected market prices.
Due to the supply chain disruptions caused by the coronavirus pandemic as well as the uncertainties associated with trade agreements and tariff disputes, price volatility is expected though the end of the fiscal year.
At the moment, the company’s factories are being run normally with no supply chain or delivery disruptions. Amid the coronavirus scare, the company is directing its efforts toward the effective management of its operations.
Disclosure: I do not hold any positions in the stocks mentioned.
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