Sanderson Farms (SAFM) Misses Q4 EPS by 5c, Revenue Beats

Sanderson Farms (NASDAQ: SAFM) reported Q4 EPS of ($1.05), $0.05 worse than the analyst estimate of ($1.00). Revenue for the quarter came in at $906.5 million versus the consensus estimate of $891 million.

“We continue to make progress toward full production at our new poultry complex in Tyler, Texas,” added Sanderson. “The startup in Tyler has gone very well, and we are now processing at approximately 75 percent capacity. We expect to reach full production of 1.3 million head per week at the new plant during our second fiscal quarter of 2020. At full production, that plant will produce approximately 390 million pounds of tray pack product annually for our retail grocery store customers. We also continue to evaluate sites for our next poultry complex, and, as always, look forward to our next phase of growth.

“We are cautiously optimistic as we enter fiscal and calendar 2020. Poultry market prices have moved counter-cyclically higher in November and December, and most expect protein markets to be supported in 2020 by a worldwide protein deficit caused by African swine fever’s impact on Asian pork supplies. In addition, increased promotional activity for chicken sandwiches at quick-serve restaurants and higher expected prices for beef and pork should also support a stronger poultry market as we move into 2020.

“As of October 31, 2019, our balance sheet reflected $1.774 billion in assets, stockholders’ equity of $1.418 billion and net working capital of $365.4 million. We believe our balance sheet provides us with the financial strength not only to support our growth strategy, but also to consistently manage our operations through the cycles that characterize our industry. We deeply appreciate the hard work and dedication to excellence of our employees, growers and everyone associated with our company,” Sanderson concluded.

For earnings history and earnings-related data on Sanderson Farms (SAFM) click here.

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