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Andersons (ANDE) Q2 Earnings Top, Revenues Miss Estimates

The Andersons, Inc.ANDE posted earnings of 76 cents per share in second-quarter 2018, up 41% from the adjusted earnings of 54 cents reported in the year-ago quarter. Earnings beat the Zacks Consensus Estimate of 8 cents handily.

Including one-time items, the company reported a loss of 94 cents in the prior-year quarter. The company did not have any adjustment in this quarter.

Operational Update

Revenues in the reported quarter dipped around 8% year over year to $911 million. The reported figure also missed the Zacks Consensus Estimate of $1,346 million. The downside resulted from the adoption of new revenue-recognition rules that changed the treatment of a significant amount of Grain Group's sales transactions.

The Andersons, Inc. Price, Consensus and EPS Surprise

The Andersons, Inc. Price, Consensus and EPS Surprise | The Andersons, Inc. Quote

Cost of sales fell 9% to $821 million from $906 million posted in the prior-year quarter. Gross profit improved 3% year over year to $90.5 million. Gross margin expanded 120 basis points to 10% in the quarter.

Operating, administrative and general expenses were down 14% year over year to $60 million. Andersons reported an operating income of $30.6 million in the second quarter compared to $18.3 million recorded in the year-earlier quarter.

Segment Performance

The Grain Group: Revenues declined 25% year over year to $366 million from $488 million generated in the year-ago quarter. The segment reported an operating income of $9.9 million compared with $6.9 million recorded in the comparable quarter last year.

The Ethanol Group: Revenues jumped 7% year over year to $201 million. The segment reported an operating profit of $6.1 million, a 31% year-over-year increase from $4.7 million recorded in the year-ago quarter.

The Plant Nutrient Group: The segment reported revenues of $303 million, up around 14.5% year over year. It reported an operating profit of $15.1 million compared to a loss of $25.8 million in second-quarter 2017.

The Rail Group: Revenues in this segment went up 8.6% year over year to $41.4 million. Operating income declined significantly to $0.9 million from $5.9 million recorded in the prior-year quarter.

Financial Performance

Andersons reported cash and cash equivalents of $58.6 million at the end of the second quarter, up from $18.9 million reported at the end of the prior-year quarter. The company's long-term debt was $436 million as of Jun 30, 2018, compared with $354 million as of Jun 30, 2017.

Share Price Performance

In the past year, Andersons has outperformed its industry with respect to price performance. The stock has gained around 22%, while the industry has depreciated around 53%.

Zacks Rank & Key Picks

Andersons currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the same sector include Celanese Corporation CE , Huntsman Corporation HUN and KMG Chemicals, Inc. KMG . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Celanese has a long-term earnings growth rate of 10%. The stock has gained around 20% in a year's time.

Huntsman Corporation has a long-term earnings growth rate of 8.5%. The company's shares have been up 28% during the past year.

KMG Chemicals has a long-term earnings growth rate of 28.5%. Its shares have surged 40% in the past year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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