Cagle`s (NYSE AMEX:CGL.A)

ATLANTA, Feb. 8, 2011 /PRNewswire/ -- Cagle's, Inc. today reported 

• a net (loss) of $(2.2) million, or $(0.46) per share, on net sales of $72.0 million for the third quarter ended January 1, 2011.  
• For the comparable quarter a year ago the company reported a net (loss) of $(0.3) million, or $(0.08) per share, on net sales of $70.4 million.

Entering into our fourth quarter our industry has shown restraint with current egg sets now close to equal those of last year. Competing protein prices are heading to record highs as the consumer is beginning to feel the impact of higher feed cost. In our third quarter, Cagle's began a 20% cut back in production at our deboning operation in an effort to balance supply and demand. We are optimistic that our industry will exhibit the production restraint necessary to support higher pricing for our products allowing for return to profitable margins.

Yesterday morning we coded CGL.A as a GeoSpecial @ $9.73. 

The company  

• Has put together three strong EPS quarters in a row
  
  • 4th quarter 2009 vs. 2008: $0.20 vs. $0.11
  • 1st quarter 2010 vs 2009:  $0.75 vs. $0.28
  • 2nd quarter 2010 vs 2009:  $0.65 vs. $0.15
    
• Was selling slightly above its book value per share of $9.07
  
• Is optimistic about the remaining two quarters of fiscal 2011 March ending year.
  
• Was selling at a trailing P/E of 6.3.

Caveats

• Lack of historical EPS consistency, weak revenue growth and a debt to equity ratio of 42.5% could limit P/E expansion.
  
• Although the company is optimistic about the near-term outlook, it still communicated some caution.