Cal-Maine Foods Inc., the largest U.S. egg supplier, dropped the most in almost seven years after posting disappointing fiscal first-quarter earnings because of the impact of the national outbreak of avian influenza.
The shares tumbled 12 percent to $50.63 in New York. Costs increased for purchasing eggs, packaging and security measures to stop future bird flu outbreaks, while profit and revenue for the period rose to an all-time high, Jackson, Mississippi-based Cal-Maine said Monday in a statement. Egg prices jumped to a record after the culling of infected chicken flocks.
“Our industry is still feeling the effects of the substantial reduction in the national laying hen flock that occurred this past spring,” Chairman and Chief Executive Officer Dolph Baker said in the statement. “We believe that egg prices will remain very high until the supply situation returns to more normal levels.”
Net income was $2.95 a share in the three months through Aug. 29, up from 57 cents a year earlier, the company said. The average of four analysts’ estimates compiled by Bloomberg was for profit of $3.14. Sales rose 71 percent to $609.9 million, compared with the $597.7 million average projection.
On Friday, the shares reached $58.72, the highest since May 26.
Post Holdings Inc. fell 9.1 percent to $6.12 Monday for its biggest drop since August 2014. The cereal maker owns eggs processor Michael Foods and has said that 25 percent of its egg volume was affected by the avian flu outbreak. In May, Post estimated that the outbreak would cost the company $20 million this year. Last week, Post said it agreed to buy Willamette Egg Farms for $90 million. Post said it would combine the business, which has production facilities in Oregon and Washington, with Michael Foods.