LAUREL, Miss. (AP) — Chicken producer Sanderson Farms Inc. on Thursday reported its third straight quarterly loss, saying it was squeezed by lower demand from restaurants and higher prices for feed.
The Mississippi company lost $56 million, or $2.51 per share, for the May to July period, after making a profit of $36 million in the same period a year ago. That included a charge of 65 cents per share to mark down the value of its inventory of chickens.
The loss was worse than analysts had expected: the consensus estimate of analysts surveyed by FactSet was a loss of 96 cents per share. Some analysts had lowered their expectations in the days leading up to the earnings report.
Though revenue climbed 4.5 percent to $511 million, it missed analysts' expectations for $515 million.
Joe Sanderson Jr., the CEO for nearly 22 years and the son of one of the founders, said in a statement that the results "reflect difficult market conditions." He said that demand from grocery stores had remained steady but demand from restaurants had fallen. Sanderson Jr. expects that trend to continue until the jobless rate shrinks. He also noted that the company is paying more for corn and soybean meal, which it uses for feed. It expects grain costs to remain higher for the rest of this year compared with 2010.
Sanderson also predicted that demand will fall again after Labor Day, in line with normal seasonal trends. The company had previously planned to trim production in November and December, but Sanderson said those cuts will remain in place into 2012.