Why Cal-Maine Foods Stock Soars Today
The egg producer had a better quarter than feared.
stock cal maine food (careful 3.62%) It rose as high as 7.2% early Wednesday and closed up 3.6% after the egg producer reported better-than-expected quarterly results. This comes despite news of a new avian flu outbreak at one of the facilities.
Cal-Maine Foods’ Better-than-Feared Quarter
For the fiscal third quarter ended March 2, 2024, Cal-Maine Foods’ revenue decreased 29.5% year-over-year to $703.1 million, resulting in net income of $146.7 million, or $3 per share, compared to $6.62 per share for the same year. decreased from). before period). Analysts on average modeled earnings of just $2.46 per share on revenue of nearly $692 million.
Looking more closely at the results, the company’s decline in revenue was driven entirely by lower average selling prices. In the third quarter of last fiscal year, egg prices hit record highs due to supply chain issues and the impact of several avian flu outbreaks across the country. Net average selling price per dozen during the quarter was $2.152, down 41.5% year-over-year, but overall sales and earnings were bolstered by record quarterly sales in terms of total dozen sold.
What’s next for Cal-Maine Foods investors?
Cal-Maine Foods announced with its quarterly results that one of its facilities in Texas tested positive for avian flu. This has forced the company to “reduce” 1.6 million laying hens and 337,000 hens, or about 3.6% of the total flock, as of March 2, 2024. The company said it had temporarily halted production at that facility and was working on it. We secure production at other facilities to minimize impact to our customers.
According to Cal-Maine, from November 2023 to January 2024, the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service, a global outbreak of avian influenza will decimate the commercial hen and pullet population by an estimated 15.7 million birds. decreased. nation.
Cal-Maine obviously wants to minimize the impact on domestic laying hens, but considering a better-than-feared quarter and the prospect of potentially higher egg prices in the near future, it’s not surprising to see the stock rally today.
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Cal-Maine Foods. The Motley Fool has a disclosure policy.
