The Andersons Sees Almost 90% Drop in Profits for Q1 2015
Due to a slow start to the season this year, The Andersons saw a nearly 90% year on year drop in profits for the first quarter of 2015, falling from $22.7 million in the first quarter of 2014 to $4.1 million this year. That represents a drop from $0.80 cents per share to $0.14 cents per share. Revenues also fell for the company, dropping 5% year on year from $1 billion in the first quarter of 2014 to $950 million for the first quarter 2015.
Both profits and revenue results failed to match Wall Street expectations, with the average net profit estimate by Zacks Investment Research being $0.38 cents per share, while revenues were forecast to be $974.4 million.
Despite these returns, The Andersons chief executive, Mike Anderson is upbeat about the balance of the year. In the first quarter, The Andersons saw its ethanol group remain profitable despite industry-wide tighter margins, saw year on year improvements to its core grain and rail leasing businesses, continued successfully integrating its 2014 acquisitions that accounted for more than $1 million in pre-tax income for the quarter, and merged its turf and specialty unit into its plant nutrition division. The company also reconciled its 2014 reduction of its stake in the Lansing Trade Group grain trading company from 47% to 39%. If not accounting for the benefit resulting from the 8% sale, the company’s adjusted net income for the first quarter of 2014 would have been $12.1 million, or $0.42 cents per share instead of $22.4 million.
The company did state, however, that its plant nutrition unit saw lower than expected sales for the quarter due to adverse weather conditions, but that the lower than expected sales volumes experienced over the past two quarters are expected to rebound significantly in the second quarter 2015 as weather improves.