Sanderson Farms more than doubled its net income for the first quarter of fiscal year 2018, the company reported.

The net income rose to $51.2 million, for the three-month period ending January 31, which compared to a net income of $24 million for the first quarter of fiscal year 2017. The company’s net sales for the quarter amounted to $771.9 million, in increase from the $688.3 million for the first quarter of fiscal year 2017.

As a result of the company’s adoption of Accounting Standards Update 2016-09, Improvements to Employee Share-Based Payment Accounting, during the third quarter of fiscal 2017, the income tax expense on the statement of operations for the three months ended January 31, 2017, is $852,000 less than the amount originally reported in the company’s financial statements for the first quarter of fiscal 2017. In turn, adoption increased the company’s net income by $852,000, or $0.04 per share, from what was originally reported.

Net income for the quarter reflects a one-time non-cash tax benefit of $37.5 million as a result of an adjustment to the company’s deferred income tax liability to reflect a lower tax rate resulting from the recent federal tax reform legislation.

“Our results for the first quarter reflect higher market prices for dark meat products sold from our big bird deboning plants compared with last year’s first quarter, offset by lower white meat prices,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Poultry market prices for tray pack products sold to retail grocery store customers were higher when compared with the same period a year ago and continued to reflect a healthy supply and demand balance in that customer market. On the other hand, the overall food service market remains weak. Traffic numbers through legacy food service chains continue to trend lower, and market prices for boneless breast meat reflect that weakness. Demand and prices for jumbo wings weakened counter seasonally during the quarter, and market prices were lower by nine percent when compared to last year’s first quarter.”

According to Sanderson, overall market prices for poultry products were lower during the first quarter compared with the same period last year. Compared with the first fiscal quarter of 2017, the average prices of the company’s retail tray pack products were approximately 2.1 percent higher, boneless breast meat prices were approximately 2.8 percent lower, bulk leg quarters increased by approximately 15.9 percent, and jumbo wing prices were lower by 9.0 percent.

Impact of feed costs

The company’s average feed cost per pound of poultry products processed decreased approximately one half cent per pound, or 1.9 percent, compared with the first quarter of fiscal 2017, and prices paid during the quarter for corn and soybean meal, the company’s primary feed ingredients, increased 1.0 percent and decreased 3.5 percent, respectively, compared with the first quarter of fiscal 2017.

“Record corn and soybean crops harvested in the United States last fall contributed to healthy soybean and corn balance tables heading into the 2018 planting season,” said Sanderson. “Strong export demand and weather challenges for the Argentine crops, however, have supported higher prices for both corn and soybeans despite ample supplies of both grains.

Updates on new facilities

Construction at Sanderson Farms’ new Tyler, Texas, complex began in the fall of 2017 and continues on schedule to open in the first calendar quarter of 2019.

The company also reached near full production at the its plant in St. Pauls, North Carolina, in January and will move to full production in April, added Sanderson.