Sanderson Farms Inc. (NASDAQ:SAFM) saw its shares drop in pre-market trading after the company posted weaker-than-expected fourth quarter profit hurt by weak poultry prices, hurricane disruptions and higher-than-expected chicken production.
The Nasdaq-listed company reported quarterly net income of US$72.9mln, or US$3.20 a share, down from US$76.0mln, or US$3.36 a share a year earlier, well below the consensus for a rise to US$3.49.
Market conditions weaken
The profit fall came even though Sanderson’s fourth quarter sales rose to US$919.9mln, up from US$790.8mln, and above consensus for US$911mln.
In a statement, Joe Sanderson, the firm’s chief executive said: "Market conditions weakened during our fourth fiscal quarter of 2017, as market prices declined seasonally after Labor Day. The seasonal decrease in demand was exacerbated by hurricane disruptions and higher than expected chicken production caused by higher than expected live weights.”
In pre-market trading, Sanderson Farms’ shares were 4.7% lower at US$159.77.