Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell) on Feb 8, 2014.
Why the Downgrade?
Penford Corporation reported disappointing financial results for
the fiscal first quarter of 2014 (ended Nov 30, 2013) on Jan 9,
2014. Since then the company's share price has plunged 15%.
A brief snapshot of Penford's financial results has been provided
Earnings per share in the quarter were 4 cents, way below 14
cents earned in the year-ago quarter. Sales declined by 7.4%
primarily due to an 11% fall in the company's Industrial
Ingredients revenue, offset partially by a 3.6% increase in Food
Despite the 6% decline in cost of sales, lower revenues pulled
down gross profit by 19%. Gross margin in the quarter was 9.8%,
down 140 basis points year over year while operating margin was
1.4%, down 190 basis points year over year.
Weak fiscal first quarter 2014 results as well as a negative
average earnings surprise of 83.8% make us pessimistic of fiscal
second quarter 2014 results. Also, in the last 30 days, the Zacks
Consensus Estimate for Penford has decreased by 13.3% to 65 cents
for fiscal 2014 (ending Aug 2014) and by 5% to 95 cents for
Other Stocks to Consider
Penford Corporation is a $139 million company operating in the
specialty chemicals industry. Some better-ranked stocks in the
International Flavors & Fragrances Inc.
Sensient Technologies Corp.
). All these companies hold a Zacks Rank #2 (Buy).
INTL F & F (IFF): Free Stock Analysis
NEWMARKET CORP (NEU): Free Stock Analysis
PENFORD CORP (PENX): Free Stock Analysis
SENSIENT TECH (SXT): Free Stock Analysis
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