Cal-Maine Foods Inc. (NASDAQ: CALM) reported its fiscal first-quarter financial results before the markets opened on Monday. Overall this quarter was a disaster on both the top and bottom lines, but with the investor reaction it would seem that earnings were only slightly off. Numbers for this quarter were primarily driven lower from a very weak shell egg market.
The company posted a net loss of $0.64 per share on $239.8 million in revenue. Thomson Reuters consensus estimates had called for a net loss of $0.33 per share and revenue of $274.57 million. In the same period of last year, Cal-Maine posted EPS of $2.96 and $609.89 million in revenue.
First-quarter results were also affected by lower co-pack business and a small decline in specialty egg volume compared with the prior year period. Sales of specialty eggs accounted for 22.9% of total number of shell eggs sold and 46.7% of shell eggs revenue for the first quarter of fiscal 2017.
Operations ran well during the summer months, but the company experienced higher farm production costs primarily due to ongoing capital improvement and conversion projects. Feed costs per dozen produced were marginally higher than last year as well.
On the books, Cal-Maine’s cash and short-term investments totaled $306.85 million at the end of the quarter, compared to $389.5 million at the end of the previous fiscal year.
Dolph Baker, board chair, president and chief executive, commented:
Our results for the first quarter of fiscal 2017 reflect a disappointing shell egg market with more challenging market conditions and significantly lower market prices than the first quarter of fiscal 2016. Average customer selling prices dropped 58 percent from the record high levels we experienced a year ago. As the supply of shell eggs moved higher after the disruptions created by the Avian Influenza outbreak in the spring of 2015, market prices declined. Retail demand remained favorable; however, lower institutional demand for egg products and reduced egg exports pushed inventory levels higher and created additional pricing pressures. As cited in recent USDA Chickens and Eggs Reports, the increase in chicks hatched indicates the national laying flock will continue to expand. Based on this report, we expect the shell egg supply will continue to grow through calendar 2016, and then we may begin to see a correction early next year.
Shares of Cal-Maine were last seen down 2.5% at $41.10, with a consensus analyst price target of $39.00 and a 52-week trading range of $39.60 to $63.25.
In 20 Years, I Haven’t Seen A Cash Back Card This Good
After two decades of reviewing financial products I haven’t seen anything like this. Credit card companies are at war, handing out free rewards and benefits to win the best customers.
A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges.
Our top pick today pays up to 5% cash back, a $200 bonus on top, and $0 annual fee. Click here to apply before they stop offering rewards this generous.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.