It has been about a month since the last earnings report for The Andersons (ANDE - Free Report) . Shares have lost about 2.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Andersons' Loss Widens in Q3, Revenues Decline Y/Y
Andersons posted adjusted loss of 12 cents per share in third-quarter 2018 compared to a loss of 9 cents reported in the year-ago quarter. Including one-time items, the company reported a loss of 7 cents in the prior-year quarter, which included a benefit of14 cents per share from its venture capital arm, primarily related to the sale of an investment, and expenses of 9 cents per share associated with the pending Lansing Trade Group acquisition. The company did not have any adjustment in the prior-year quarter.
Operational Update
Revenues in the reported quarter dipped around 18% year over year to $686 million. The year-over-year downside primarily resulted from the company's adoption of new revenue recognition rules at the beginning of 2018 that changed the accounting treatment of a significant amount of the Grain Group's sales transactions.
Cost of sales fell around 18% to $632 million from $767 million posted in the prior-year quarter. Gross profit declined23% year over year to $54 million. Gross margin contracted 40 basis points to 7.9% in the quarter.
Operating, administrative and general expenses were down 3% year over year to $66 million. Andersons reported an operating loss of $12 million in the third quarter, as against income of $1.5 million recorded in the year-earlier quarter.
Segment Performance
The Grain Group: Revenues plunged 31% year over year to $343 million from $498 million generated in the year-ago quarter. The segment reported an operating loss of $8.6 million against an operating income of $2.6 million recorded in the comparable quarter last year.
The Ethanol Group: Revenues inched up 1.7% year over year to $195 million. The segment reported an operating profit of $9.1 million, a 49% year-over-year jump from $6.1 million recorded in the year-ago quarter.
The Plant Nutrient Group: The segment reported revenues of $104 million, which remained flat year over year. It reported an operating loss of $8 million, which remained flat year over year.
The Rail Group: Revenues in this segment remained flat year over year at $43.1 million. Operating income declined to $5.7 million from $6.1 million recorded in the prior-year quarter.
Financial Performance
Andersons reported cash and cash equivalents of $16.8 million at the end of the third quarter, down from $24.5 million reported at the end of the prior-year quarter. The company’s long-term debt was $437 million as of Sep 30, 2018, compared with $371 million as of Sep 30, 2017.
Andersons is expected to benefit from the combination of the Grain Group and Lansing Group, which will provide greater value to customers and shareholders, expand opportunities for employees and increase profitability. Pre-close integration work on the acquisition is well underway. The company expects to close the transaction by the end of January 2019.
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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It has been about a month since the last earnings report for The Andersons (ANDE - Free Report) . Shares have lost about 2.4% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Andersons' Loss Widens in Q3, Revenues Decline Y/Y
Andersons posted adjusted loss of 12 cents per share in third-quarter 2018 compared to a loss of 9 cents reported in the year-ago quarter. Including one-time items, the company reported a loss of 7 cents in the prior-year quarter, which included a benefit of14 cents per share from its venture capital arm, primarily related to the sale of an investment, and expenses of 9 cents per share associated with the pending Lansing Trade Group acquisition. The company did not have any adjustment in the prior-year quarter.
Operational Update
Revenues in the reported quarter dipped around 18% year over year to $686 million. The year-over-year downside primarily resulted from the company's adoption of new revenue recognition rules at the beginning of 2018 that changed the accounting treatment of a significant amount of the Grain Group's sales transactions.
Cost of sales fell around 18% to $632 million from $767 million posted in the prior-year quarter. Gross profit declined23% year over year to $54 million. Gross margin contracted 40 basis points to 7.9% in the quarter.
Operating, administrative and general expenses were down 3% year over year to $66 million. Andersons reported an operating loss of $12 million in the third quarter, as against income of $1.5 million recorded in the year-earlier quarter.
Segment Performance
The Grain Group: Revenues plunged 31% year over year to $343 million from $498 million generated in the year-ago quarter. The segment reported an operating loss of $8.6 million against an operating income of $2.6 million recorded in the comparable quarter last year.
The Ethanol Group: Revenues inched up 1.7% year over year to $195 million. The segment reported an operating profit of $9.1 million, a 49% year-over-year jump from $6.1 million recorded in the year-ago quarter.
The Plant Nutrient Group: The segment reported revenues of $104 million, which remained flat year over year. It reported an operating loss of $8 million, which remained flat year over year.
The Rail Group: Revenues in this segment remained flat year over year at $43.1 million. Operating income declined to $5.7 million from $6.1 million recorded in the prior-year quarter.
Financial Performance
Andersons reported cash and cash equivalents of $16.8 million at the end of the third quarter, down from $24.5 million reported at the end of the prior-year quarter. The company’s long-term debt was $437 million as of Sep 30, 2018, compared with $371 million as of Sep 30, 2017.
Andersons is expected to benefit from the combination of the Grain Group and Lansing Group, which will provide greater value to customers and shareholders, expand opportunities for employees and increase profitability. Pre-close integration work on the acquisition is well underway. The company expects to close the transaction by the end of January 2019.
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.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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