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Andersons (ANDE) Down 0.1% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for The Andersons (ANDE - Free Report) . Shares have lost about 0.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Andersons due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Andersons Q2 Earnings Top, Revenues Miss Estimates

Andersons 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 handily beat the Zacks Consensus Estimate of 8 cents.

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.

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 June-end 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 jump 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 witnessed 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.

 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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