Sanderson Farms Crushes Earnings Estimates

Seth Jayson, The Motley Fool
Updated

Sanderson Farms (NAS: SAFM) reported earnings on May 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 30 (Q2), Sanderson Farms beat slightly on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded.


Margins expanded across the board.

Revenue details
Sanderson Farms logged revenue of $595.0 million. The five analysts polled by S&P Capital IQ predicted a top line of $586.6 million on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $479.3 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.04. The eight earnings estimates compiled by S&P Capital IQ averaged $0.85 per share. GAAP EPS were $1.04 for Q2 compared to -$0.74 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 9.9%, 1,120 basis points better than the prior-year quarter. Operating margin was 6.9%, 1,170 basis points better than the prior-year quarter. Net margin was 4.0%, 740 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $608.5 million. On the bottom line, the average EPS estimate is $1.24.

Next year's average estimate for revenue is $2.32 billion. The average EPS estimate is $3.20.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 223 members out of 241 rating the stock outperform, and 18 members rating it underperform. Among 61 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 54 give Sanderson Farms a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sanderson Farms is hold, with an average price target of $50.17.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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