Andersons Well Behind Ests

The Andersons, Inc. (ANDE - Analyst Report) reported third-quarter earnings of 7 cents per share, well below the Zacks Consensus Estimate of 39 cents and prior-year earnings of 70 cents per share. Apart from the Grain & Ethanol Group, all other segments posted an operating loss for the quarter. Revenues declined 33.6% to $601 million from $905.7 million in the year-ago period, primarily due to lower grain and plant nutrient prices.

The Grain & Ethanol Group's revenues fell 30.8% during the quarter due to continued weakness in commodity prices. The segment’s operating income was down 6.0% at $8.9 million compared to $9.4 million last year. While the income from grain business was down significantly during the quarter, the ethanol business benefited from improved margins and from the finalization of The Andersons Albion Ethanol LLC business interruption claim.

The Rail Group's revenues of $21.2 million were down 25.5% from $28.4 million last year. The segment posted an operating loss $1.1 million in the quarter, compared to operating income of $5.2 million in the third quarter of 2008, due to continued double digit declines in rail traffic, as well as a decline in average utilization rate to 74.4% from 93.3% in the prior-year quarter. The decline in utilization rates resulted in higher storage expense due to idle assets, increase in maintenance costs, and lower leasing rates.

The Plant Nutrient Group continues to suffer from deflation in basic nutrient prices. The group posted on operating loss of $2.8 million on revenues of $70.4 million, compared to operating income of $7.2 million on revenues of $162 million in the third quarter of 2008. The sales volumes were down due to continued de-stocking of the retail dealer inventory.

The Turf and Specialty Group posted similar results compared to last year. The current quarter saw an operating loss of $0.3 million on revenues of $21.5 million, while the group posted an operating loss of $0.5 million on revenues of $23.2 million in the comparable quarter of 2008.

Lower consumer spending remains a problem for the Anderson’s Retail Group. Revenues dropped 9.5% to $37.2 million from $41.1 million in the prior-year period. The segment posted an operating loss of $2.3 million, compared to operating loss of $0.2 million last year.