The Andersons Inc
) reported fourth-quarter 2012 earnings of 80 cents per share, a
decrease of 31% from the prior year quarter's earnings of $1.17
per share. The results missed the Zacks Consensus Estimate of 89
Anderson, which is among the leading players in the agriculture
and farm products industry along with
Archer Daniels Midland Co
), posted earnings of $4.23 per share for full-year 2012, a
decline of 17% from $5.09 posted in 2011. It also missed the
Zacks Consensus Estimate of $4.33.
Revenues in the reported quarter augmented 29% year over year to
$1.7 billion. It was ahead of the Zacks Consensus Estimate of
Revenues for the full year increased 15% to $5.3 billion from
$4.6 billion in 2011 and exceeded the Zacks Consensus Estimate of
Cost of sales increased 30.5% to $1.58 billion in the fourth
quarter from $1.21 billion in the year-ago quarter. Gross profit
improved 5.5% year over year to $91.2 million while gross margin
contracted 120 basis points (bps) to 5.42% in the quarter.
Operating, administrative and general expenses went up 10% year
over year to $69.6 million. Operating profit declined 7.2% to
$21.6 million. Consequently, operating margin decreased 50 bps to
1.28% in the quarter.
The Grain Group
: Revenues increased 37% year over year to $1.2 billion in the
reported quarter due to higher sales volume and grain pricing.
Operating income dropped 33.6% to $18.1 million. The decline was
due to lower space income as a result of drought.
The Ethanol Group
: Revenues increased 30% year over year to $215 million. However,
there was an operating loss of $0.80 million compared with an
operating income of $6.5 million in the year-ago quarter due to
significantly lower ethanol margins resulting from a weak
gasoline demand, an oversupply of ethanol, and a rise in corn
costs caused by drought.
The Plant Nutrient Group
: The group reported revenues of $178 million, up 4.7% from the
year-ago quarter due to higher volume. Operating income increased
88% to $4.7 million as favorable weather helped to increase
nutrient application, resulting in higher volume.
The Rail Group
: Revenues increased 16% to $29 million in the quarter. Operating
income increased nearly four-fold to $8.6 million. The increase
was due to higher sales of railcars and lease rates as well as
The Turf & Specialty Group
: The segment posted revenues of $21 million, a 16.6% year over
year increase. Operating loss was $1.2 million compared with an
operating loss of $1.8 million in the year-ago quarter.
The Retail Group
: Revenues in the segment decreased 8.8% to $41 million.
Operating loss was $0.9 million compared with the operating
income of $0.5 million in the year-ago quarter.
Cash and cash equivalents increased nearly seven-fold year over
year to $138.2 million at the end of 2012. Long-term debt was
$427.2 million as of Dec 31, 2012, a 79% year-over-year increase.
Debt-to-capitalization ratio increased to 41% as of Dec 31, 2012,
from 31% as of Dec 31, 2011.
Andersons said that it will focus on long-term earnings growth.
It has opened a grain elevator in Anselmo and is looking forward
to opening a new railcar blast and paint facility soon.
The company expects that drought conditions will negatively
impact the earnings of both the Grain and Ethanol businesses
through the first half of 2013.
The recent acquisition of assets from Green Plains Grain Company
and Mt. Pulaski Products will boost Andersons' top and bottom
lines. However, continuing losses at the Ethanol and Turf &
Specialty groups cause a great deal of concerns.
Andersons retains a short-term Zacks Rank #3 (Hold).
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
To read this article on Zacks.com click here.