Source: Rita Jane Gabbett, MEATINGPLACE, 7/29/11

Stephens Inc. analyst Farha Aslam is now predicting a fiscal third quarter loss for Sanderson Farms because poultry prices moved down counter-seasonally between Memorial Day and July 4.

In a note to investors, Aslam forecast a third quarter loss of $1.10 per share compared to her earlier prediction the company would earn 17 cents per share. The new forecast puts Aslam well below consensus expectation that Sanderson will report a loss of 38 cents per share for the quarter.

Aslam shifted her fiscal 2011 forecast to a loss of $3.30 per share from a loss of $1.49 per share predicted earlier.

In 2012, she expects Sanderson to return to profitability. She now estimates Sanderson will earn $3.35 per share in fiscal 2012, down from $3.44 predicted earlier, largely due to higher depreciation and amortization for the new Kinston facility.

Aslam said three factors will determine future earnings: 1) poultry industry production levels, 2) grain prices and 3) demand level driven by the economy and employment.  

For more stories, go to www.meatingplace.com.