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American Vanguard (AVD) Q2 Earnings Top, Sales Miss Estimates

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American Vanguard Corporation (AVD - Free Report) logged a profit of $5.6 million or 19 cents per share for second-quarter 2018, up around 30% from roughly $4.3 million or 15 cents it earned a year ago. Earnings per share beat the Zacks Consensus Estimate of 17 cents.

Revenues surged around 37% year over year to $107 million in the reported quarter, driven by the addition of new product lines from acquisitions completed last year. Sales, however, missed the Zacks Consensus Estimate of $113 million.

The company’s net sales from the United States went up 15% year over year to $64.4 million while international revenues shot up 93% to $42.7 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 fell roughly 17% year over year to $32.7 million in the reported quarter.

Sales from the herbicides/soil fumigants/fungicides business jumped around 96% to $31.4 million in the quarter.

Revenues from the other business, including plant growth regulators, surged three-fold to $30.4 million.

Sales from the non-crop business rose around 2% to $12.6 million in the quarter.

Financials

American Vanguard ended the quarter with cash and cash equivalents of roughly $7.1 million, down around 6% year over year. Long-term debt was $74.3 million, up nearly three-fold year over year.

Outlook

Moving ahead, American Vanguard sees strong performance across a number of major components of its business through the remainder of 2018. The company envisions seasonally higher sales of soil fumigants and cotton defoliant Folex as well as improved sales in its Central American region and non-crop business in the next two quarters. American Vanguard also expects sustained demand for its products in fruit and vegetables, strong sales of its Dibrom mosquito adulticide and stable demand for its corn products.

Considering these factors, the company sees annual net sales in the range of $450-$470 million for 2018.

Price Performance

American Vanguard’s shares have lost 10.9% over the past three months, underperforming the 3% growth of the industry it belongs to.



 

Zacks Rank & Stocks to Consider

American Vanguard currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks worth considering in the basic materials space include KMG Chemicals, Inc. (KMG - Free Report) , Ingevity Corporation (NGVT - Free Report) and Celanese Corporation (CE - Free Report) each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have gained roughly 43% over a year.

Ingevity has an expected long-term earnings growth rate of 12%. The company’s shares have rallied around 78% in a year.

Celanese has an expected long-term earnings growth rate of 10%. Its shares have shot up roughly 22% over a year.

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