Shares of Cal-Maine Foods (NASDAQ: CALM) were far from calm on Sept. 30 after the company reported first-quarter results that were worse than already low expectations, causing the stock to dip back below the $40 mark in above-average volume. Sales at the country's largest producer of fresh shell eggs fell 29% to $241.2 million, marking a rough start to the company's new fiscal year. The $0.94 loss per share was deeper than the Factset's $0.85 analyst consensus, and it marked a dramatic swing from last year's $0.26-per-share profit. Consistent with Cal-Maine's dividend policy whereby shareholders receive a dividend only in profitable periods, no dividend was paid for the first quarter.
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Sales volume actually rose by 1.7% in the quarter, as dozens of eggs sold increased to 254.4 million from 250 million in the first quarter last year. However, this was more than offset by a sharp 30% drop in the average selling price of conventional eggs, from $1.307 per dozen to $0.915. The lower prices were a reflection of oversupply conditions that have plagued the egg market since early 2018. Cal-Maine's results, while disappointing, were consistent with the weekly USDA Egg Market News Report of Sept. 23, which characterized recent market activity as "slow to moderate."