Cal-Maine Foods Inc. (CALM) beat estimates for quarterly earnings on Monday as the coronavirus outbreak boosts demand for the U.S. producer’s eggs.
Looking ahead, the producer and distributor of fresh eggs sees more price volatility this year as egg prices soared to record levels since the end of the third quarter and as the COVID-19 pandemic creates more uncertainty regarding future disruptions.
Cal-Maine Foods said net income dropped to $13.7 million, or 28 cents a share, in the quarter to Feb. 29, from $39.8 million, or 82 cents a share, in the year-earlier period amid more challenging market conditions. Sales fell 10% to $345.6 million due to lower average egg prices. (See Cal-Maine Foods earnings on TipRanks)
“An unfavorable balance of egg supply and demand continued to adversely affect market prices,” said Dolph Baker, chairman and CEO of Cal-Maine Foods. “Ongoing uncertainties and supply chain disruptions related to the COVID-19 outbreak and geopolitical issues surrounding trade agreements and international tariffs could create more price volatility in the future.”
Ben Bienvenu, four-star Wall Street analyst at Stephens, this month raised the company’s stock to Buy from Hold. Bienvenu’s $47 price target suggests 15% upside potential for the shares in the coming 12 months. (See Cal-Maine Foods stock analysis on TipRanks)
Cal-Maine Foods said that its businesses and facilities are operating “normally” during the outbreak of the coronavirus pandemic, and that is has not experienced any supply chain or delivery disruptions.
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