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Sanderson Farms (SAFM) Beats on Q1 Earnings and Revenues
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Sanderson Farms, Inc. reported better-than-expected results for first-quarter fiscal 2018 (ended Jan 31, 2018).
Earnings/Revenues
Adjusted earnings in the reported quarter came in at $2.20 per share, outpacing the Zacks Consensus Estimate of $1.07. The bottom line also surged a massive 115.7% year over year.
Net sales in the reported quarter came in at $771.9 million, surpassing the Zacks Consensus Estimate of $767 million. Also, the top line came in 12.1% higher than the year-ago tally. The uptick stemmed from improved productivity of the company’s St. Pauls processing facility and increased demand for poultry products. Moreover, elevated market prices for bulk-leg quarters and chicken products (sold to the grocery store customers) also supported the upswing.
Sanderson Farms, Inc. Price, Consensus and EPS Surprise
Cost of sales in fiscal first quarter increased 15.8% year over year to $702.1 million. Selling, general and administrative expenses flared up 14.1% year over year to $52.6 million.
Operating margin in the reported quarter came in at 2.2%, shrinking 300 basis points (bps) year over year.
Balance Sheet/Cash Flow
Exiting the fiscal first quarter, Sanderson Farms had cash and cash equivalents of $388.9 million, lower than $419.3 million recorded on Oct 31, 2017.
In the first three months of fiscal 2018, the company generated $25 million cash from operating activities, as against $39.5 million cash accrued in the year-ago quarter end. Capital expenditure for the fiscal first quarter totaled $51.7 million, up 11.8% year over year.
Outlook
Sanderson Farms believes sturdier demand and improved productivity will help boost its revenues in the upcoming quarters. In addition to this, the Tax Cut and Jobs Act (implemented in December 2017) will lower the company’s corporate tax burden and thereby improve its bottom-line performance in the near future.
Zacks Rank and Stocks to Consider
Sanderson Farms carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Consumer Staples sector are listed below:
Blue Buffalo Pet Products, Inc. (BUFF - Free Report) holds a Zacks Rank of 2. The company generated an average positive earnings surprise of 3.14% during the same time frame.
Church & Dwight Company, Inc. (CHD - Free Report) , which also has a Zacks Rank of 2, recorded an average positive earnings surprise of 6.61% over the preceding four quarters.
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Sanderson Farms (SAFM) Beats on Q1 Earnings and Revenues
Sanderson Farms, Inc. reported better-than-expected results for first-quarter fiscal 2018 (ended Jan 31, 2018).
Earnings/Revenues
Adjusted earnings in the reported quarter came in at $2.20 per share, outpacing the Zacks Consensus Estimate of $1.07. The bottom line also surged a massive 115.7% year over year.
Net sales in the reported quarter came in at $771.9 million, surpassing the Zacks Consensus Estimate of $767 million. Also, the top line came in 12.1% higher than the year-ago tally. The uptick stemmed from improved productivity of the company’s St. Pauls processing facility and increased demand for poultry products. Moreover, elevated market prices for bulk-leg quarters and chicken products (sold to the grocery store customers) also supported the upswing.
Sanderson Farms, Inc. Price, Consensus and EPS Surprise
Sanderson Farms, Inc. Price, Consensus and EPS Surprise | Sanderson Farms, Inc. Quote
Costs/Margins
Cost of sales in fiscal first quarter increased 15.8% year over year to $702.1 million. Selling, general and administrative expenses flared up 14.1% year over year to $52.6 million.
Operating margin in the reported quarter came in at 2.2%, shrinking 300 basis points (bps) year over year.
Balance Sheet/Cash Flow
Exiting the fiscal first quarter, Sanderson Farms had cash and cash equivalents of $388.9 million, lower than $419.3 million recorded on Oct 31, 2017.
In the first three months of fiscal 2018, the company generated $25 million cash from operating activities, as against $39.5 million cash accrued in the year-ago quarter end. Capital expenditure for the fiscal first quarter totaled $51.7 million, up 11.8% year over year.
Outlook
Sanderson Farms believes sturdier demand and improved productivity will help boost its revenues in the upcoming quarters. In addition to this, the Tax Cut and Jobs Act (implemented in December 2017) will lower the company’s corporate tax burden and thereby improve its bottom-line performance in the near future.
Zacks Rank and Stocks to Consider
Sanderson Farms carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Consumer Staples sector are listed below:
Craft Brew Alliance, Inc. carries a Zacks Rank of 2 (Buy). The company pulled off an outstanding average positive earnings surprise of 250.20% over the last four quarters. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Blue Buffalo Pet Products, Inc. (BUFF - Free Report) holds a Zacks Rank of 2. The company generated an average positive earnings surprise of 3.14% during the same time frame.
Church & Dwight Company, Inc. (CHD - Free Report) , which also has a Zacks Rank of 2, recorded an average positive earnings surprise of 6.61% over the preceding four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>