Egg maker Cal-Maine Foods (NASDAQ:CALM) suffered a 22% drop in fiscal third-quarter profits as the egg producer grappled with higher feed costs that offset rising sales.
The Jackson, Miss.-based company said it earned $26.1 million, or $1.09 a share, last quarter, compared with a profit of $33.6 million, or $1.40 a share, a year earlier.
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Cal-Maine, which is the largest U.S. producer and distributor of fresh egg shells, said its sales increased 11% to $303.7 million.
Hit by the higher costs, gross margins shrank to 21.5% from 23.9%.
The parent of Eggland’s Best and Farmhouse said its quarterly feed costs soared 11.1% year-over-year.
“Our feed costs have continued to affect our production costs in fiscal 2012,” CEO Dolph Baker said in a statement. “We expect feed costs will remain very high and volatile throughout the summer of calendar 2012 due to tight supplies of corn and soybeans, our primary feed ingredients.”
Shares of Cal-Maine, which have rallied almost 15% so far this year, were flat ahead of Monday’s open.