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Egg producer Cal-Maine Foods' (NASDAQ:CALM) share price fell in pre-market trade Monday after it said third-quarter earnings fell 22 percent as higher feed costs and lower margins ate into its bottom line, which masked sales growth.

The company, whose third-quarter ended February 25, reported earnings of $26.1 million, or $1.09 per share. This is down from $33.6 million, or $1.40 per share, in the year-ago period. The year-ago quarter included a one-time cash distribution of roughly 13 cents a share received for the company's non-voting stock ownership in the Eggland's Best Inc. co-operative, it said.

Net sales rose 10.6 percent to $303.7 million from $274.7 million, reflecting higher average selling prices and demand for shell eggs, the company said. Analysts polled by Bloomberg were forecasting earnings of $1.13 per share, on revenue of $306 million. Before the opening bell, Cal-Maine’s share price lost 76 cents, or 1.81 percent, falling to $41.19 Monday on the Nasdaq.

Average selling prices for shell eggs climbed 3.3 percent in the quarter, while prices for specialty eggs, which have a higher retail price, grew nine percent. Specialty eggs include nutritionally enhanced, cage-free and organic eggs.

Feed costs, however, jumped 11.1 percent to 4.5 cents per dozen eggs from a year ago. "We expect feed costs will remain very high and volatile throughout the summer of calendar 2012 due to tight supplies of corn and soybeans, our primary feed ingredients," said Chief Executive Dolph Baker in a statement.

Gross margin fell to 21.5 percent in the latest quarter from 23.9 percent a year earlier, due to rising feed costs. In addition, the company said it will pay a dividend of 36.4 cents per Class A common stock. The payout will be paid to shareholders on May 10, 2012.

Cal-Maine Foods, which is headquartered in Jackson, Mississippi, is the largest producer and distributor of fresh shell eggs in the United States. It sells the majority of its shell eggs in approximately 29 states across the southwestern, southeastern, midwestern and mid-Atlantic regions of the U.S.

Disclosure: None.

Source: Cal-Maine's Q3 Profit Drops On Higher Costs, Weak Margins