Cal-Maine Plunges as Labor, Feed Costs Dent Earnings -Breaking
By Dhirendra Tripathi
Investing.com – Cal-Maine stock (NASDAQ:) plummeted 7.3% in Wednesday’s pre-market trading after the egg-producer’s second-quarter earnings fell short of estimates.
Even though there were more eggs sold, higher costs in terms of processing, shipping, and labor, earnings were affected by the increased cost of feed ingredients, packing, transportation, and labor.
Company warnedMarket prices for primary ingredients remained volatile in this financial year. This outlook is due to ongoing disruptions caused by the pandemic and weather fluctuations, as well as geopolitical concerns.
The company’s dividend policy led them to skip a dividend payout again this quarter, which also weighed on the stock. The company wants to return to their cumulative profit, dating back to the quarter in which they last paid a dividend. came in last winter’s quarter. Cal-Maine will pay a dividend if there is still a cumulative loss.
Net average selling prices for eggs increased by 12% to $1.37 a dozen during the second quarter ending November 27. A company release stated that total dozens sold has increased to 276million, up from 274million in the preceding-year period.
Dolph Baker, Chairman and Chief Executive Officer of Dolph Baker, attributed the higher volume to continual improvement in restaurant traffic. He also stated that a strong export market helped to support demand for egg products and shell eggs.
The second quarter saw farm production costs per dozen rise by around 22%. This was due to 29% more feed costs per dozen.
The net sales rose by more than 12% to $391 millions in the second quarter. It reported a profit $1.17million, which is less than one tenth its profit from the previous quarter.
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