Cal-Maine Foods Inc (NASDAQ:CALM) Beat Wall Street Estimates

Cal-Maine Foods Inc (NASDAQ:CALM) stock rose 4.10% (As on April 3, 11:13:47 AM UTC-4, Source: Google Finance) after the company reported fiscal third-quarter results that beat Wall Street estimates as record sales helped ease the impact of falling egg prices. Dozens eggs sold in the quarter swelled to 300.8M in the quarter from 294.4M in the quarter earlier, but at lower prices. The net average selling price per dozen $2.247 in Q2 compared with $3.298 a year earlier.  Conventional eggs sold reached 192.2 million dozens, up 2.6%, while specialty eggs sold were 108.6 million dozens, a 4.4% increase over the prior-year period. These results represent the highest total dozens sold and highest specialty dozens sold in any quarter for Cal-Maine Foods. Net income attributable to Cal-Maine Foods for the third quarter of fiscal 2024 was $146.7 million compared with $323.2 million for the third quarter of fiscal 2023. Specialty dozens sold were 36.1% of total dozens sold in the third quarter of fiscal 2024 compared with 35.7% in the prior-year period.

CALM in the third quarter of FY 24 has reported the adjusted earnings per share of $3.01, beating the analysts’ estimates for the adjusted earnings per share of $2.11. The company had reported the adjusted revenue of $703.1 million in the third quarter of FY 24, beating the analysts’ estimates for revenue of $603.7 million. The company has reported operating income of $162.8 million for the third quarter of fiscal 2024, compared with operating income of $407.8 million for the prior-year quarter, primarily reflecting lower market prices.

In their post-earnings note, Goldman Sachs analysts maintained a Sell rating on CALM, citing expectations that egg market supply/demand will continue to face pressures “from moderating seasonal demand post-Easter and into summer, balanced by continued supply uncertainty posed by HPAI.”

“As of now, prices thus far in FY4Q24 have tracked above our prior forecast, and combined with some additional HPAI supply losses,” they added, urging them to lift their GAAP EPS estimates for the quarter to $2.43, up from the previous $1.98.

“We continue to believe HPAI-induced supply shortfalls and their associated impact on pricing and CALM earnings should not be fully capitalized beyond excess cash generation, particularly as CALM has seen continued growth in net cash balances ($695mn at FY3Q24, or 24% of market cap) that is only generating interest income below the company’s cost of equity,” analysts said.

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