LAUREL, Miss. (AP) — Sanderson Farms' second-quarter profit jumped almost 40 percent, but declining chicken prices and rising expenses still left the company short of Wall Street expectations.
Shares dropped 3 percent Thursday.
The industry is dealing with a bird-flu outbreak that has afflicted as many as many as 42 million chickens, turkeys, ducks and other poultry across the Midwest.
Sanderson has said that the outbreak is hurting exports, but did not address the issue Thursday.
The Laurel, Mississippi, company earned $71.2 million, or $3.13 per share, for the three months ended April 30. That is better than the $51 million, or $2.21 per share, from a year ago, but well off the per-share earnings of $3.50 that analysts were looking for, according to analysts surveyed by Zacks Investment Research .
Costs and expenses climbed to $607.1 million from $582.2 million. Income tax expense increased to $37.6 million from $26.8 million.
The poultry producer's revenue rose to $716.6 million from $660.7 million. However, analysts polled by FactSet expected higher revenue of $726.8 million.
The average selling price for boneless breast meat fell about 4.4 percent, while the price for bulk leg quarters slid approximately 20.3 percent.
Shares of Sanderson Farms Inc. declined $2.57 to $81.93.