Shares of Sanderson Farms Inc. SAFM, +2.54% tumbled 5.4% in premarket trade Thursday, after the poultry production, processing and distribution company reported fiscal third-quarter results that missed expectations, citing “significantly lower” market prices for meats, while feed costs rose. Net income for the quarter to July 31 fell to $11.5 million, or 50 cents a share, from $115.8 million, or $5.09 a share, in the same period a year ago. The company said earnings per share in the latest quarter reflects an accrual for probably liability for a contribution to the employee stock ownership plan of 8 cents. The FactSet EPS consensus was $1.29. Sales fell to $852.4 million from $931.9 million, below the FactSet consensus of $867.0 million. “Sanderson Farms’ financial results for the third quarter of fiscal 2018 reflect significant counter-seasonal weakness in market prices for boneless breast meat produced for food service customers,” said Chief Executive Joe Sanderson. “We believe the counter-seasonal softness is due, at least in part, to a lack of chicken promotions at both food service and retail grocery stores and an ample supply of competing proteins.” Meanwhile, feed costs per pound of chicken processed increased 5.8%. The company said it expects chicken will continue to compete against an abundant of domestic protein supply, which could continue to pressure market prices. The stock had plunged 23% year to date through Wednesday, while the S&P 500 SPX, -0.04% had gained 7.0%.

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