Shares of specialty chemical company
American Vanguard Corp.
) dropped as much as around 6% in the trading session after it
announced that revenues for the first quarter of 2014 are
expected to be down roughly 33% from the last-year quarter. The
fall is anticipated due to unfavorable weather conditions in the
Midwestern U.S. that has resulted in elevated channel
American Vanguard's net earnings for the first quarter are
expected to range within break even to a few cents per share. Its
shares eventually closed at $20.14 on Apr 11, losing around 1.7%.
Persistent wet weather conditions during the 2013 crop planting
season has resulted in reduced application of many crop
protection inputs that are used at the time of planting, such as
AMVAC's granular soil insecticides. This surplus inventory in the
distribution channel has been drawn down as purchases are made in
the 2014 spring planting season.
These surplus inventories coupled with planting delays caused by
the harsh winter weather in 2014 has slowed new order activity
for the company's soil insecticides. American Vanguard expects
some of the purchases to be made in Apr and May 2014 that will be
reflected in the second-quarter results, which otherwise would
have ordinarily been included in first-quarter results.
Though purchasing patterns of corn products have been disrupted
due to the sluggish procurement pattern which disproportionately
affected the overall performance of American Vanguard and its
peers, it is a temporary market condition and the demand for corn
products is expected to continue to grow once the conditions
normalize. In the meantime, the company is in constant contact
with the channel partners and is tracing market needs to meet the
expectation throughout the new planting season.
American Vanguard makes specialty chemical products for
agricultural and commercial applications. The company develops
and markets an array of chemicals, including insecticides,
fungicides and herbicides, for crop, human and animal health
protection. American Vanguard has the largest assortment of corn
soil insecticides coupled with the most advanced dispensing
American Vanguard currently carries a Zacks Rank #5 (Strong
Other companies in the specialty chemical industry worth
Globe Specialty Metals, Inc.
Rockwood Holdings, Inc.
), with all of them carrying a Zacks Rank #2 (Buy).
AMER VANGUARD (AVD): Free Stock Analysis
GLOBE SPECIALTY (GSM): Free Stock Analysis
NOVOZYMES A/S (NVZMY): Get Free Report
ROCKWOOD HLDGS (ROC): Free Stock Analysis
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