CORRECTED – UPDATE 4-Sanderson Farms resumes exports to Russia

(Corrects 5th paragraph to show chicken export figure is for
United States, not Sanderson Farms)

* Q3 EPS $1.55 vs Street view $1.87

* Net sales off 3 pct

* Hot weather cuts production

* Shares up 4.5 percent after Russia news

By Bob Burgdorfer

CHICAGO, Aug 23 (BestGrowthStock) – Sanderson Farms Inc (SAFM.O: )
said it has resumed chicken exports to Russia, one of the first
U.S. companies to confirm shipping to that market since Russian
authorities banned U.S. poultry in January.

Sanderson shares rose 4.5 percent as investors hoped the
resumed shipments would boost revenue and chicken prices. The
news took Wall Street’s focus away from the company’s
weaker-than-expected quarterly results.

Russia banned imports of U.S. chickens in January because
of a chlorine rinse disinfectant used in the United States. But
it has lifted the prohibition on some plants that have switched
to other disinfectants.

Sanderson Chief Executive Joe Sanderson called potential
Russian demand “spectacular.” He said shipments still trail
pre-ban levels because not enough plants have been approved to
resume sales to Russia.

In the first quarter of 2010, the United States shipped
just under 34,000 metric tonnes of chicken to Russia, down
nearly 80 percent from the same period a year earlier.

The Russian ban has hurt chicken prices. In Sanderson’s
third quarter, ended July 31, prices for leg quarters were down
22 percent.

The lower chicken prices and a heat wave that slowed
chickens’ growth hurt Sanderson’s quarterly profit.

The Laurel, Mississippi-based company earned $36.1 million,
or $1.55 a share, in the third quarter, down from $43.0
million, or $2.06 a share, a year earlier.

Revenue fell 3.1 percent to $489.1 million.

Analysts, on average, expected earnings of $1.87 a share on
revenue of $518.6 million, according to Thomson Reuters

Sanderson saw slightly lower costs for corn and soybean
meal in the quarter. But chicken production was 10 million
pounds, or 1.6 percent, below company expectations amid
unusually hot, humid weather. Temperatures frequently hit 100
degrees Fahrenheit in some areas.

“We lost some time during the quarter just because the
birds were not big enough,” Lampkin Butts, Sanderson’s chief
operating officer, said during a conference call.

Sanderson raises and processes chickens and sells the meat
to grocery stores, restaurants and export markets. CEO
Sanderson said demand at grocery stores remained strong, but
restaurant demand was sluggish and would remain so until
unemployment eases and consumers have more money to eat out.

Sanderson shares were up $1.92 to $45.08 in afternoon trade
on the Nasdaq. The shares are down nearly 19 percent since
mid-July and fell as low as $41.56 on Monday before the news on

Sanderson also said it expects its facility in Kinston,
North Carolina, to begin processing poultry in January.
(Reporting by Bob Burgdorfer; additional reporting by Phil
Wahba in New York and Shradhha Sharma in Bangalore; Editing by
Maureen Bavdek and John Wallace)

CORRECTED – UPDATE 4-Sanderson Farms resumes exports to Russia