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Andersons (ANDE) Slips to Loss in Q3, Shares Down

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Shares of The Andersons Inc.ANDE lost roughly 2.4% since the company reported a loss in the third quarter of 2015 on Nov 4. The company incurred a loss of 4 cents per share in the reported quarter as against earnings per share of 59 cents in the year-ago quarter. The Zacks Consensus Estimate was earnings of 37 cents per share.

Operational Update

Revenues in the reported quarter declined 1.8% year over year to $935.8 million and also fell short of the Zacks Consensus Estimate of $941 million.

Cost of sales fell 2% to $850.6 million from $868 million in the year-ago quarter. Gross profit inched up 0.03% year over year to $85 million. This led to a 20 basis point increase in gross margin to 9.1% in the quarter.

Operating, administrative and general expenses went up 15.6% year over year to $88.7 million. Andersons posted an adjusted loss of $1.2 million in the quarter. The company, however, posted adjusted earnings of $16.8 million in the year-ago quarter.

Segment Performance

The Grain Group : Revenues decreased to $570.6 million from $575 million in the year-ago quarter. Operating income declined substantially to $0.1 million from $12.5 million in the year-ago quarter due to a significant drop in equity earnings and lower core grain business results.

The Ethanol Group: Revenues decreased 22% year over year to $139 million. The segment reported operating income of $5.9 million, tumbling 72% from $21.3 million in the year-ago quarter.

The Plant Nutrient Group: The segment reported revenues of $149 million, up 12% year over year. The segment reported a loss of $11 million, wider than the year-ago loss of $3 million, adversely impacted by ongoing and one-time costs associated with recent acquisitions and lower demand.

The Rail Group: Revenues declined 39.8% year over year to $44.8 million. Operating income rose to $11.9 million from $4.2 million in the year-ago quarter on the back of its focus on asset management, which led to higher lease and utilization rates.

The Retail Group: Revenues for the segment decreased to $31.9 million from $32.7 million in the year-ago quarter. The segment posted a loss of $0.8 million in the quarter, compared with a $0.9 million loss in the prior-year quarter.

Financial Performance

The Andersons ended the quarter with cash and cash equivalents of $40.7 million compared with $326.9 million at the end of the third quarter of 2014. Long-term debt was $413.6 million as of Sep 30, 2015 compared with $289 million as of Sep 30, 2014.

The Andersons increased its dividend from 14 cents to 15.5 cents per share to be paid on Jan 25, 2016, to holders of record as of Jan 4, 2016.

Maumee, OH-based The Andersons is a diversified company operating in six different business segments ranging from buying, selling and storing grain to leasing railcars and running retail stores catering to the latest home hardware needs.

The Andersons currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the sector are AK Steel Holding Corp. AKS , Asanko Gold Inc. AKG and Celanese Corp. CE . All these stocks carry a Zacks Rank #2 (Buy).

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ANDERSONS INC (ANDE): Free Stock Analysis Report

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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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