Anderson's Earnings and Sales Lag
The Andersons Inc.
) reported first-quarter 2013 earnings of 67 cents per share,
down 32% from 98 cents per share earned in the year-ago quarter.
The results also missed the Zacks Consensus Estimate of 86 cents.
Loss at the Plant Nutrient and Retail Groups and decline in
operating profit at the Grain Group offset the increase in
operating profit in the rest of the segments, leading to the
Revenues in the reported quarter augmented 12% year over year to
$1.27 billion. The results slightly fell short of the Zacks
Consensus Estimate of $1.3 billion.
Cost of sales increased 13% to $1.19 billion in the first quarter
from $1.05 billion in the year-ago quarter. Gross profit declined
7.7% year over year to $79.2 million. Consequently, gross margin
contracted 130 basis points (bps) to 6.2% in the quarter.
Operating, administrative and general expenses went up 3% year
over year to $62 million. Operating profit declined 33% to $17
million. Thus, operating margin reduced 90 bps to 1.35% in the
The Grain Group:
Revenues increased 19% year over year to $836 million in the
reported quarter due to the addition of the Green Plains Grain
facilities, resulting in higher sales volume and grain pricing.
Operating income dropped 57% to $8.3 million, driven by droughts
in 2012 resulting in lower space income.
The Ethanol Group:
Revenues grew 32% year over year to $199 million, helped by
incremental volumes stemming from the Denison, Iowa plant
acquisition in the second quarter of 2012. Segment operating
income rose 24% to $2.5 million from $0.1 million in the year-ago
quarter due to improved ethanol margins and increased co-product
The Plant Nutrient Group:
The group reported revenues of $112 million, down 36% from the
year-ago quarter, led by significant decrease in volume.
Moreover, delays in fieldwork and adverse weather condition
resulted in the decline. The group reported an operating loss of
$0.6 million compared to the operating income of $5.8 million in
the prior-year quarter.
The Rail Group:
Revenues spiked 28% to $46 million in the quarter. Operating
income increased nearly two-fold to $14.6 million. The increase
was attributable to higher lease rates and increased income from
The Turf & Specialty Group:
The segment posted revenues of $47 million, a 4.4% year-over-year
increase. Operating income doubled to $4 million in the first
quarter, driven by increased margin in the lawn business, partly
offset by volume decline.
The Retail Group:
Revenues in the segment decreased 3% year over year to $31
million. Costs related to the closing of the Woodville store
resulted in increased operating loss of $3.2 million compared
with $2.7 million in the year-ago quarter.
ARCHER DANIELS (ADM): Free Stock Analysis
ANDERSONS INC (ANDE): Free Stock Analysis
BUNGE LTD (BG): Free Stock Analysis Report
MONSANTO CO-NEW (MON): Free Stock Analysis
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Cash and cash equivalents were $58.3 million as of Mar 31, 2013
compared with $31.8 million as of Mar 31, 2012. Long-term debt
amounted to $412.7 million as of Mar 31, 2013, compared with
$427.2 million as of Mar 31, 2012. The debt-to-capitalization
ratio contracted to 39.8% as of Mar 31, 2013 from 41.1% as of Mar
Andersons expects the Rail Group to continue to perform well
based on proficiently managed railcar portfolio. The Plant
Nutrient Group should also benefit from an anticipated record
corn crop planting in the second quarter, if weather cooperates.
While the 2012 drought remains the headwind, which will impact
the profitability and ethanol businesses this year.
The recently acquired assets from Green Plains Grain Company and
Mt. Pulaski Products will boost Andersons' top and bottom line.
Furthermore, the Rail Group witnessed a solid run in 2012 and the
momentum is expected to continue in 2013 as well.
However, the U.S drought will likely continue to negatively
impact the grain and ethanol businesses in 2013. Furthermore,
continuing losses at the Plant Nutrient Group and the Retail
group remains a concern.
Maumee, Ohio-based Andersons is a diversified company rooted in
agriculture. The company conducts business across North America
in the grain, ethanol, and plant nutrient sectors, railcar
leasing, turf and cob products, and consumer retailing.
Andersons currently retains a short-term Zacks Rank #3 (Hold).
Other companies in the agriculture and farm products industry are
Archer Daniels Midland Co