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American Vanguard (AVD) Q3 Earnings Top, Sales Trail Estimates

Anindya Barman
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American Vanguard (AVD) Q3 Earnings Top, Sales Trail Estimates

American Vanguard (AVD) sees strong sales from its soil fumigants and Equus fungicide in Q4.

American Vanguard Corporation AVD saw higher profits in the third quarter of 2018. The company logged a profit of $6.5 million or 22 cents per share for the quarter, up around 59% from roughly $4.1 million or 14 cents it earned a year ago. Earnings per share surpassed the Zacks Consensus Estimate of 21 cents.

Revenues climbed around 24% year over year to $111.8 million in the reported quarter, driven by the contributions from acquisitions completed last year. The company witnessed solid performance from its cotton products in the quarter. Sales, however, missed the Zacks Consensus Estimate of $117.8 million.

The company’s net sales from the United States went up 9% year over year to $71.7 million while international revenues shot up 66% to $40.1 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 rose roughly 2% year over year to $25.5 million in the reported quarter.

Sales from the herbicides/soil fumigants/fungicides business went up around 6% to $34.6 million in the quarter.

Revenues from the other business, including plant growth regulators, more than doubled to $35.3 million.

Sales from the non-crop business rose around 8% to $16.4 million in the quarter.

Financials

American Vanguard ended the quarter with cash and cash equivalents of roughly $9.4 million, up around 4% year over year. Long-term debt was $97.3 million, up around 70% year over year.

Outlook

Moving ahead, American Vanguard sees strong sales from its soil fumigants and Equus fungicide as well as from its domestic non-crop and Central America distribution businesses on a year over year basis in the fourth quarter.

The company also envisions sustained demand for its products in fruits and vegetables as well as pre-season purchasing demand for its corn products going into the 2019 spring planting season.

Considering these factors, the company expects to achieve revenues in the band of $450-$460 million for 2018 and gross margins in line with its year-to-date performance.

Price Performance

American Vanguard’s shares have lost 14.4% over the past three months, underperforming the 1.1% decline of the industry it belongs to.



 

Zacks Rank & Stocks to Consider

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

Other top-ranked stocks in the basic materials space include Methanex Corporation MEOH, CF Industries Holdings, Inc. CF and KMG Chemicals, Inc. KMG.

Methanex has expected long-term earnings growth rate of 15% and sports a Zacks Rank #1 (Strong Buy). Its shares have gained 26% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has expected long-term earnings growth rate of 6% and carries a Zacks Rank #1. Its shares have rallied 44% in a year.

KMG Chemicals has expected long-term earnings growth rate of 28.5% and carries a Zacks Rank #2. Its shares have shot up 40% in the past year.

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