The improvement was due primarily to a 14.5 percent increase in sales to $232 million from $202 million in the third quarter of 2002.

Sanderson, based in Laurel, Miss., produces, processes, and markets fresh and frozen chicken products. It is the seventh largest processor of dressed chickens in the United States.

In Tuesday's morning conference call, President, Chairman and CEO Joe F. Sanderson Jr. attributed some of the increased profitability to market prices for chicken, which were between 3 percent and 15 percent higher than last year. The company lowered its cost of goods sold to 84 percent from 88.6 percent in the year-earlier quarter, and widened its operating margin from 7.85 percent to 11.1 percent. Over the first nine months, however, Sanderson said, chicken prices have been mixed.

The company suffered from higher feed costs, Sanderson said: corn prices were up 9 percent, and soybean meal prices 9.5 percent, from the same quarter last year. While Sanderson estimated those prices cost the company in the neighborhood of $17 million, that was offset by $12.2 million in revenue from price-fixing settlements against vitamin suppliers.

Sanderson's sales and income have been steadily increasing since low sales and tight margins led to heavy losses in 2000. In 2002 the company doubled its annual dividend from 20 to 40 cents after a 760,000 share buyback, and Sanderson suggested the board will look at raising it again if expected cash flows materialize in the coming year.

Net earnings for the nine months were $33.6 million, or $2.55 per diluted share, up 50.6 percent from $22.3 million, or $1.66 per diluted share, in the same period last year.

Sales rose to $617 million from $542 million.

Despite the recent strong showings, however, Sanderson indicated the company was unlikely to expand its operations because of the possibility of prices falling again, and would instead concentrate on improving operating efficiency.

The company has reduced its debt-to-capital ratio to less than 7 percent, said CFO Mike Cockrell in Tuesday's earnings call.

Sanderson's stock fell slightly Tuesday to $29.87. The stock has hovered around $30 a share since the beginning of the month, after rising from a $15.50 low last October.