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Andersons' (ANDE) Q4 Earnings & Revenues Miss Estimates

The Andersons Inc.ANDE reported adjusted earnings of 36 cents per share in fourth-quarter 2016, up 100% from 18 cents per share reported in the prior-year quarter. Earnings, however, fell short of the Zacks Consensus Estimate of 72 cents by a wide margin of 50%.

Including one-time items, the company had posted a loss of $1.68 in the year-ago quarter. The reported quarter did not include any such adjustments.

Operational Update

Revenues in the reported quarter declined 6% year over year to $1,113 million and fell short of the Zacks Consensus Estimate of $1,346 million.

The Andersons, Inc. Price, Consensus and EPS Surprise

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

Cost of sales fell 7% to $1,009 million from $1,084 million in the prior-year quarter. Gross profit increased 4.6% year over year to $103.7 million. Consequently, gross margin expanded 10 basis points to 9% in the quarter.

Operating, administrative and general expenses went down 5% year over year to $84.6 million. Andersons posted adjusted income of $10 million in the quarter, compared with $5 million in the year-earlier quarter.

Segment Performance

The Grain Group: Revenues went down 4.2% year over year to $745 million from $778 million in the year-ago quarter. The segment reported an adjusted operating profit of $12.9 million as against earnings of $9.8 million in the year-ago quarter. Improved crop conditions in the Eastern Corn Belt and shedding of its underperforming Iowa assets helped drive growth.

The Ethanol Group: Revenues increased 3.4% year over year to $147.9 million. The segment reported an operating profit of $11.7 million, a 52% surge from $7.7 million in the comparable quarter in the prior year. The improvement was driven by higher margins compared to the prior year.

The Plant Nutrient Group: The segment reported revenues of $136.4 million, down 27% year over year. The segment reported an operating loss of $3.8 million compared with adjusted pretax income of $2.1 million in the year-ago quarter, hurt by$3.3 million expenses incurred while closing a cob production and storage facility in Mount Pulaski, IL, during the quarter. The group's performance in the fourth quarter was also hampered by persistent pressure on volumes and margins; each were down compared to fourth-quarter 2015. Declining fertilizer prices as well as lower net farm income also impacted its performance.

The Rail Group: Revenues climbed 25% year over year to $45.5 million. Operating income jumped 43% to $9.7 million from $6.8 million in the prior-year quarter.

Retail Group: Revenues inched up 0.3% year over year to $38 million. The segment reported an operating loss of $6.2 million, compared with a gain of $1 million in the year-ago quarter.

Financial Performance

Andersons reported cash and cash equivalents of $62.6 million at the end of 2016, down from $63.8 million as of Dec 31, 2015. Long-term debt was $397 million as of Dec 31, 2016, compared with $436.2 million as of Dec 31, 2015.

2016 Performance

Andersons posted adjusted earnings of 41 cents per share for 2016, down 71% year over year. Earnings also missed the Zacks Consensus Estimate of 77 cents. On a reported basis, including special items, Andersons' earnings were 41 cents per share in the year, as against a loss of 46 cents in 2015.

Revenues for full-year 2016 dipped 6.5% year over year to $3.92 billion. In addition, revenues missed the Zacks Consensus Estimate of $4.16 billion

Share Price Performance

In the last one year, Andersons has outperformed the Zacks classified Agriculture/Products sub-industry with respect to price performance. The stock gained around 44.6%, while the industry rose 14.9% over the same time frame.

Zacks Rank

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

Some better-ranked stocks in the sector include Ternium S.A. TX , Methanex Corporation MEOH and IAMGOLD Corporation IAG . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Ternium has an earnings ESP of 11.38% for the trailing four quarters. Methanex Corporation has an average earnings surprise of 28.76% forthe last four quarters, while IAMGOLD Corporation has an average earnings surprise of 49.29% for the past four quarters.

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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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