Vertically integrated poultry company Cagle's Inc. is stabilizing after losses in fiscal 2009. Although it reported a small loss in the third quarter of fiscal 2010, the balance for the first three quarters overall was positive.
Cagle’s reported a net loss of $0.3M, or $0.08 per share, for the fiscal third quarter ending January 2, 2010, compared with a net loss of $2.5M, or $0.54 per share, for the third quarter of fiscal 2009. For the first nine months of fiscal 2010, net income was $1.6M, or $0.35 per share, compared with a net loss of $11.0M, or $2.36 per share, in the first nine months of fiscal 2009.
Due to a shorter measurement period—13 weeks in 2010 versus 14 weeks in 2009—third quarter revenues were down 4.2% year-on-year to $70.4M and pounds sold decreased 2.0%. For the nine-month period, revenues were up 4.4% to $236.0M and sales pounds increased 2.7% compared to the same period in the prior year. Quoted market prices for boneless breast increased 9% in the third quarter of fiscal 2010 compared with the third quarter of 2009. Breast tenders increased 15%, wings increased 36%, drums decreased 2%, leg quarters decreased 6%, and whole birds without giblets fell 12%.
Cost of sales for the third quarter of fiscal 2010 decreased 8.2% compared with the same period last year, from $72.9M to $66.9M. Cagle’s attributed this change to the shorter measurement period, coupled with a 2.0% decrease in pounds sold and a 7.1% reduction in the cost of feed. For the first nine months of 2010, cost of sales was $220.5M, down 4.2% from fiscal 2009.
Cagle’s expects healthy margins for the remainder of fiscal year 2010, thanks to record 2009 corn and soy crops and protein suppliers cutting back on breeding in 2010 to avoid excess inventory.
