Cal Maine Foods Inc. (NASDAQ: CALM) has announced that it will release its fiscal Q2 2022 earnings on Tuesday, December 28, 2021, after market close.
What to look for
The company has been expanding its operations, and its Board recently approved a cage-free egg production project of $23 million at the Okeechobee, Florida facility. Cal-Maine will construct two-layer houses and a cage-free pullet house with approximately 400,000 cage-free hens and 210,000 pullets capacity. Construction will commence in mid-2022, and the company will fund the project using cash on hand. In the first quarter, the company's results reflected challenging conditions with sales impacted with low conventional egg sale volumes, but selling price was higher. In addition, Shell egg demand has dropped from the pandemic highs, with restaurants opening, meaning consumers can now eat more out-of-home.
Earnings: Stockearning’s Estimated EPS is expected to be better than the loss per share of $0.37. The company produced an earnings surprise of 27.45%, beating the estimated EPS loss of $0.51. In the second quarter a year ago the company had a net profit of $0.25 per share. Historical EPS performance indicates that the company has, in the past 12 quarters, beat estimates twice (16%) and missed twice (16%).
Revenue: In the first quarter, the company reported sales of $331.7 million, representing a YoY increase of 13.3%. Net loss was loss was $18 million compared to a net loss of $19.4 million in Q1 2021. In the first quarter, the average selling price was up $1.24 per dozen, up from $1.08 a year ago. The number of dozens of shell eggs sold was up 1.7% to 256.4 million.
Stock movement: CALM shares have gained marginally since the company released its Q1 2021. Interestingly, Cal Maine Foods shares have been DOWN 25 times out of the past 43 quarters. So, the historical price reaction suggests a 58% probability of the share price going DOWN once CALM reports its fiscal Q2 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 3%, while the predicted move on the seventh day is 4%.
What analysts are saying
BofA Securities analyst Peter Galbo downgraded CALM shares from Buy to Sell and lowered the price target to $38 from $47. The analyst indicated that the feed costs for the company could increase to $0.525 from $0.48 per dozen, and as a result, they are lowering FY2022 EPS from $0.7 to a loss per share of $0.01 to reflect the changes. Also, Galbo told investors in a note that the company was unlikely to pay dividends to post Q4 2021 through fiscal 2022 as Cal Maine Foods maintains a variable dividend policy and now expects net income losses in the first half of 2022.
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