Cal-Maine Profit Climbs 26%

Cal-Maine Foods Inc. said profit climbed 26% in the latest quarter, easily topping Wall Street expectations, as the egg producer again benefited from higher egg prices.

The company's stock, up 28% in the past 12 months through Thursday's close, climbed 7.1% to $53.72 in premarket trading.

Cal-Maine has seen higher egg prices in recent quarters following a reduction in the number of hens last spring because of an outbreak of avian flu that routed some competitors' flocks. However, the company has had to spend more on monitoring to guard against its chickens getting the bird flu.

Cal-Maine said Monday that there have been no positive tests for bird flu at any of its locations.

Chairman and Chief Executive Dolph Baker said prices dropped considerably in the third quarter compared with earlier in its fiscal year, though they still were up 4.3% to $1.57 a dozen from $1.50 in the prior-year quarter.

While supply has been increasing, Mr. Baker noted that the current national laying hen flock recently reported by the USDA is still about 3% lower than it was a year ago.

"Egg inventories have continued to build, and we expect market prices will remain volatile until the industry has more clarity on future supply levels," he said.

Over all, Cal-Maine posted a profit of $64.2 million, or $1.33 a share, up from $50.9 million, or $1.05 a share, a year ago. Sales climbed 2.8% to $449.8 million.

Analysts surveyed by Thomson Reuters had expected 99 cents a share on $464 million in sales.

Specialty eggs continued to make up a larger chunk of Cal-Maine's business, representing 23.6% of egg sales compared with 20.3% in the year-earlier period.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

March 28, 2016 09:15 ET (13:15 GMT)

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