Cal-Maine Foods (CALM) reported earnings on Mon 1 Oct 2018 (b/o)

** charts before earnings **

 

** charts after earnings **

 

Cal-Maine Foods misses by $0.19, misses on revs 

• Reports Q1 (Aug) earnings of $0.26 per share, $0.19 worse than the two analyst estimate of $0.45; revenues rose 29.6% year/year to $340.6 mln vs the $346.76 mln S&P Capital IQ Consensus.
• "Our operations ran well through the summer, and we reported operating income of $12.7 million compared with an operating loss of $24.4 million for the first quarter of fiscal 2018. For the first quarter of fiscal 2019, our farm production costs per dozen were up 7.3 percent, primarily due to increased feed costs."

The egg producer swung to a net income for the quarter to Sept. 1 of $12.4 million, or 26 cents a share, from a loss of $16.0 million, or 33 cents a share, in the same period a year ago. The FactSet consensus was for earnings per share of 49 cents. Sales rose to $340.6 million from $262.8 million, but was below the FactSet consensus of $350.5 million. Net average selling price per dozen eggs rose to $1.307 from $1.017, while feed cost increased to 41.3 cents from 37.5 cents. Given Cal-Maine's flexible dividend policy, in which the company pays one-third of quarterly income, the company cut its dividend to 8.5 cents a share from 35.1 cents a share in the sequential fourth quarter. "Although overall egg production growth has been modest, according to recent USDA reports, the number of chicks hatched has increased 11 percent since the beginning of calendar 2018, indicating future increases in laying hen numbers," said Chief Executive Dolph Baker. "Given these trends, the potential increase in the shell egg supply could create additional pricing pressure." The stock has gained 8.7% year to date while the S&P 500 (SPX) has climbed 9.0%.