LAUREL, Miss. (AP) — Sanderson Farms Inc. said higher feed costs and lower demand from restaurants weighed on its bottom line as losses exceeded expectations in the most recent quarter.
The chicken producer said Tuesday that it lost $29.5 million, or 97 cents per share, in its fiscal fourth quarter ended Oct. 31. That compares to a profit of $74 million, or $2.08 per share, in the same quarter of 2010.
Sales rose 6 percent to $560 million from $529 million a year ago.
For the year, the Laurel, Miss., firm lost $188.4 million, or $5.74 per share, compared to a 2010 profit of $209.8 million, or $6.07 per share.
Analysts polled by FactSet Research predicted Sanderson Farms would lose 60 cents in the quarter. One item hurting the quarter's results was a $9 million inventory markdown.
Chairman and CEO Joe F. Sanderson Jr. said prices for whole chickens have risen but boneless breast meat prices were 19 percent lower in the quarter than in the same three months of 2010 and wings were also down steeply, reflecting lower demand by restaurants and food service operations. At the same time, chicken feed cost 39 percent more in 2011 than in 2010.
A weak economy is likely to limit improvements, Sanderson said in a statement.
"We expect demand from our food service customers to remain soft until American consumers regain their confidence and the employment outlook brightens," he said.
The company said it planned to go through with a 4 percent production cut at most plants in January. But because the company opened a new processing plant in Kinston, N.C., earlier this year, Sanderson Farms' overall production will rise.
