The Andersons, Inc. (ANDE) reported fourth-quarter earnings of 88 cents per share, well above the Zacks Consensus Estimate of 42 cents and a significant improvement compared to a net loss of $1.84 per share in the fourth quarter of 2008. The company’s Grain and Ethanol group posted a strong growth in the reported quarter.
Moreover, the prior-year quarter was affected by a significant lower of cost or market adjustments as a result of sharp declines in nutrient prices. Revenues increased 18.9% to $916.0 million from $770.1 million in the year-ago period, driven by higher revenues from the Grain & Ethanol business.
The Grain & Ethanol Group’s revenues improved 27.8% year over year to $722.3 million during the quarter. The segment’s operating income more than doubled to $27.8 million from $11.9 million last year. Lower income from grain business due to late harvest in 2009 was more than offset by a significant growth in the ethanol business and Lansing Trade Group.
The Rail Group’s revenues of $21.1 million were down 23.4% from $27.6 million last year. The segment posted an operating loss $1.5 million in the quarter, compared to operating income of $3.3 million in the fourth quarter of 2008, due to continued double digit declines in rail traffic, as well as a decline in average utilization rate to 70.5%. The decline in utilization rates is resulting in higher storage expense due to idle assets, increase in maintenance costs, and lower leasing rates.
The Plant Nutrient Group reported operating income of $1.7 million on revenues of $111.4 million, compared to an operating loss of $74.5 million on revenues of $111.5 million in the fourth quarter of 2008. The group posted a loss in 2008 due to significant lower of cost or market adjustments as a result of sharp declines in nutrient prices.
The Turf and Specialty Group posted similar results compared to last year. The current quarter saw an operating loss of $1.1 million on revenues of $19.4 million, compared to an operating loss of $1.1 million on revenues of $20.1 million in the comparable quarter of 2008. While the group is benefiting from its focus on proprietary products in its lawn business, its results are affected by the weakness in the professional product market.
Lower consumer spending remains a problem for the Anderson’s Retail Group. Revenues dropped 8.7% to $41.7 million from $45.7 million in the prior-year period. The segment posted an operating loss of $0.7 million, compared to operating income of $1.0 million last year.
Read the full analyst report on “ANDE”
Zacks Investment Research
