Shares of Cal-Maine (CALM) slumped nearly 10% Monday after the egg producer reported disappointing second-quarter profit despite stronger sales.
Higher costs for corn and soybean meal, Cal-Maine’s two primary feed ingredients, as well as expenses related to recent acquisitions offset improved prices that helped lift revenue during the period.
Cal-Maine said it expects feed costs to remain high and volatile for the remainder of fiscal 2013.
The Jackson, Miss.-based company posted net income of $14.3 million, or 60 cents a share, compared with a year-earlier profit of $23.3 million, or 97 cents. The results fell 30 cents short of average analyst estimates in a Thomson Reuters poll.
The performance offset higher sales during the period. Revenue for the three month period ended Dec. 1 was $328.9 million, up from $290.4 million a year ago. Fueling the improvement was a 9.1% increase in dozens sold and higher specialty egg prices.
“We are pleased with the continued growth in sales for the second quarter of fiscal 2013; however, our operating results also reflect challenging market conditions and increased input costs,” Cal-Maine CEO Dolph Baker said in a statement.
The drought this year in the Midwest has weighed heavily on feed costs, which has had a direct impact on food companies like Cal-Maine that rely on grains like soybeans to maintain their animals.
The company’s shares were down about 9.3% to $40.55 in recent trade.