Cal-Maine Foods posts lower profit for FY 2009

Cal-Maine Foods, the nation's largest egg producer posted net earnings of $79.5 million on sales of $928.8 million for FY 2009. Cal-Maine shares dropped 10% at the market close ($27.10) as analysts had incorrectly predicted sales of $235 million (actual $213 million) for Q4 and EPS of $1 (actual 43 cents).
Net profit represented a 47% decline in income over FY08 ($151.9 million) but the company achieved a 1.5% increase in sales over the previous year. The earning per share value was virtually halved from $6.41 to $3.34. The decline in financial performance was attributed to lower egg prices which compared unfavorably with 2008 together with high feed costs which collectively reduced gross margin by 31% from 32% in FY08 to 22% in FY 2009.
Long term debt increased by $31 million in FY09 but was offset by a $43 million increase in fixed assets represented by acquisitions and expansion of existing facilities.
In a comment on the most recent results, Fred Adams Jr., chairman and CEO, stated that "sales of eggs at the retail level have been very strong with food service and restaurant volume continuing to lag, reflecting the current economic environment." He added, "our management team is performing well."