Cal-Maine Foods Inc. (NASDAQ: CALM) reported its fiscal first-quarter financial results before the markets opened on Monday. Overall this quarter was a disaster on both the top and bottom lines, but with the investor reaction it would seem that earnings were only slightly off. Numbers for this quarter were primarily driven lower from a very weak shell egg market.

The company posted a net loss of $0.64 per share on $239.8 million in revenue. Thomson Reuters consensus estimates had called for a net loss of $0.33 per share and revenue of $274.57 million. In the same period of last year, Cal-Maine posted EPS of $2.96 and $609.89 million in revenue.

First-quarter results were also affected by lower co-pack business and a small decline in specialty egg volume compared with the prior year period. Sales of specialty eggs accounted for 22.9% of total number of shell eggs sold and 46.7% of shell eggs revenue for the first quarter of fiscal 2017.

Operations ran well during the summer months, but the company experienced higher farm production costs primarily due to ongoing capital improvement and conversion projects. Feed costs per dozen produced were marginally higher than last year as well.

On the books, Cal-Maine’s cash and short-term investments totaled $306.85 million at the end of the quarter, compared to $389.5 million at the end of the previous fiscal year.

Dolph Baker, board chair, president and chief executive, commented:

Our results for the first quarter of fiscal 2017 reflect a disappointing shell egg market with more challenging market conditions and significantly lower market prices than the first quarter of fiscal 2016. Average customer selling prices dropped 58 percent from the record high levels we experienced a year ago. As the supply of shell eggs moved higher after the disruptions created by the Avian Influenza outbreak in the spring of 2015, market prices declined. Retail demand remained favorable; however, lower institutional demand for egg products and reduced egg exports pushed inventory levels higher and created additional pricing pressures. As cited in recent USDA Chickens and Eggs Reports, the increase in chicks hatched indicates the national laying flock will continue to expand. Based on this report, we expect the shell egg supply will continue to grow through calendar 2016, and then we may begin to see a correction early next year.

Shares of Cal-Maine were last seen down 2.5% at $41.10, with a consensus analyst price target of $39.00 and a 52-week trading range of $39.60 to $63.25.

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