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American Vanguard (AVD) Q1 Earnings Beat, Sales Lag Estimates

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American Vanguard Corporation ((AVD - Free Report) ) recorded profit of $3.9 million or 13 cents per share for the first quarter of 2019, down around 17% from $4.7 million or 16 cents it earned a year ago. Earnings per share for the reported quarter beat the Zacks Consensus Estimate of 12 cents.

Revenues fell around 4% year over year to $99.7 million in the reported quarter. Sales fell short of the Zacks Consensus Estimate of $102.5 million.

The company faced challenges from unfavorable weather in North America in the quarter, hurting its U.S. business. However, it saw strong gains in its international business. Total sales from the U.S. business dropped 11% while sales from the international business went up 9% in the reported quarter.

American Vanguard Corporation Price, Consensus and EPS Surprise

 

American Vanguard Corporation Price, Consensus and EPS Surprise

American Vanguard Corporation price-consensus-eps-surprise-chart | American Vanguard Corporation Quote

Segment Highlights

Revenues from American Vanguard’s insecticides business for the quarter fell 13% year over year to $40.2 million.

Sales from the herbicides/soil fumigants/fungicides business went down 14% to $31.5 million.

Revenues from the other business, including plant growth regulators jumped 81% to $15.7 million.

Sales from the non-crop business fell 4% to $12.3 million in the quarter.

Financials

American Vanguard ended the quarter with cash and cash equivalents of roughly $6.7 million, down around 49% year over year. Long-term debt was $149.3 million, up around 65% year over year.

Outlook

Going forward, American Vanguard sees strong demand for its products both domestically and internationally. The company has raised its revenue guidance for 2019 to $510-$530 million from its earlier view of $490-$510 million.

American Vanguard also expects its product mix and manufacturing performance to enable it to deliver gross profit margins in the range of 38-40%.

The company also said that it will focus on strengthening its balance sheet over the coming quarters by managing operating expenses, generating cash from higher sales, lowering inventory to a target of $145 million, maintaining factory efficiency and reducing debt to $100 million or lower.

Price Performance

American Vanguard’s shares are down 6.1% so far this year, underperforming the 15% rise of the industry it belongs to.



 

Zacks Rank and Stocks to Consider

American Vanguard currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include AngloGold Ashanti Limited (AU - Free Report) , Flexible Solutions International Inc. (FSI - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .

AngloGold has an expected earnings growth rate of 86.8% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have shot up around 38% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flexible Solutions has an expected earnings growth rate of 171.4% for the current year and carries a Zacks Rank #2 (Buy). Its shares have rallied roughly 108% in the past year.

Air Products has an expected earnings growth rate of 10.3% for the current fiscal year and carries a Zacks Rank #2. Its shares have gained around 23% in the past year.

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