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American Vanguard (AVD) Q2 Earnings & Sales Beat Estimates

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American Vanguard’s (AVD - Free Report) profits for second-quarter 2017 was $4.3 million or 15 cents per share, up around 33% from $3.2 million or 11 cents a year ago. Earnings per share beat the Zacks Consensus Estimate by a penny. The results were supported by the company’s cost control initiatives.

Revenues rose 7% year over year to $77.9 million in the reported quarter, coming ahead of the Zacks Consensus Estimate of $77 million. Sales were partly driven by strong demand for cotton products.

Moreover, the company saw healthy gains in international sales and growth in its granular soil insecticide products in the reported quarter on the back of higher demand in domestic corn, peanuts and sugar crops. This more than offset weather-related declines in soil fumigant sales and pricing pressure in corn herbicides.

The company’s sales from the U.S. went up 8% to $55.8 million, while international revenues rose 6% to $22.1 million.

American Vanguard Corporation Price, Consensus and EPS Surprise


American Vanguard Corporation Price, Consensus and EPS Surprise | American Vanguard Corporation Quote

Segment Highlights

Revenues from American Vanguard’s insecticides business climbed 28% to $39.4 million in the reported quarter.

Sales from the herbicides/soil fumigants/fungicides business fell around 24% year over year to $16 million in the quarter.

Revenues from the other business went up around 59% year over year to $10.1 million.


American Vanguard ended the quarter with cash and cash equivalents of $7.6 million, up around 31% year over year. Long-term debt was to $26.3 million, down 47% year over year.


Moving ahead, American Vanguard said that its outlook for the remainder of 2017 is positive. The company noted that significant increase cotton acreage in the U.S. should provide additional sales of its Bidrin foliar insecticide and Folex harvest defoliant in the second half of 2017. American Vanguard also sees modest international growth and a rebound in its soil fumigant business. Moreover, the company expects continued demand for its Dibrom mosquito adulticide. The company remains focused on managing working capital and operational costs and investing in technology innovation for future growth.

Price Performance

American Vanguard’s shares gained 15.3% over the past year, outperforming the 4.1% gain of the industry it belongs to.


Zacks Rank & Key Picks

American Vanguard currently carries a Zacks Rank #2 (Buy).

Other well-placed companies in the basic materials space include Westlake Chemical Corporation (WLK - Free Report) , Air Products and Chemicals, Inc. (APD - Free Report) and The Chemours Company (CC - Free Report) , all sporting a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Westlake has an expected long-term earnings growth of 7.2%.

Air Products has an expected long-term earnings growth of 11.9%.

Chemours has an expected long-term earnings growth of 15.5%.

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