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The Andersons Inc. (ANDE - Analyst Report) reported second quarter net income of $45.2 million or $2.42 per share compared with $25.2 million or $1.36 per share in the year-ago quarter. Reported earnings in the quarter were much higher than the Zacks Consensus Estimate of $1.75 per share.

Total revenue in the quarter was $1.3 billion as opposed to $811 million in the prior-year quarter. The year-over-year improvement was primarily driven by higher sales from all the company’s segments coupled with increase in prices of certain products like grains and ethanol.

Gross profit of the company increased 40.2% year over year to $122.8 million. Operating income also surged 79.3% year over year to $71.2 million.

Segmental Performance

Grain: Segment sales increased to $797.1 million from $360.6 million in the year-earlier quarter that led to a significant rise in gross profit to $51.5 million from $25.7 million in the prior-year quarter. Operating income also soared to $36.5 million from $13.4 million in the 2010 quarter.

Ethanol: The segment reported revenues of $164.7 million, up from $113.0 million in the prior-year quarter. Gross profit of the segment increased marginally to $4.8 million from $4.4 million a year ago. Operating income amounted to $8.8 million compared with $6.2 million in the year-ago quarter.

Rail: The segment’s sales increased to $29.5 million from $23.6 million in the year-earlier quarter. Gross profit of the segment rose to $6.4 million in the quarter from $4.4 million in the prior-year quarter. Operating income increased sharply to $2.8 million from $114,000 in the year-earlier quarter.

Plant Nutrient: Segment sales were $259.8 million versus $228.4 million in the prior-year quarter. Gross profit increased to $39.3 million from $31.6 million in the year-ago quarter. Operating profit was $24.1 million compared with the year-ago level of $19.0 million.

Turf & Specialty: Total sales increased marginally to $41.6 million from $41.2 million in the year-ago quarter. However, gross profit declined to $7.0 million from $8.0 million in the 2010 quarter. Similarly, operating income decreased to $1.8 million from $2.5 million in the year-earlier quarter.

Retail: Sales in the segment improved to $45.5 million from $44.1 million in the prior-year quarter. Gross profit inched up marginally to $13.8 million from $13.5 million in the corresponding quarter of 2010. The segment’s operating loss declined to $1.9 million from $2.1 million in the year-earlier quarter.

Financial Position

Cash and cash equivalents reduced sharply to $18.6 million as of June 30, 2011 from $204.3 million as of June 30, 2010. Long-term debt stood at $260.6 million at the end of the second quarter of 2011 compared with $281.7 million at the end of the second quarter of 2010. However, inventories also increased significantly to $469.6 million as of June 30, 2011 from $238.0 million as of June 30, 2010.

Based in Maumee, Ohio, The Andersons, which has a Zacks#1 Rank (Strong Buy rating), is a diversified company operating in five 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 company has operations across the U.S. and in Puerto Rico, plus rail equipment leasing interests in Canada and Mexico.

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