American Vanguard (AVD) Q3 Earnings and Sales Miss Estimates
American Vanguard Corporation AVD posted profit of $2.9 million or 10 cents per share for the third quarter of 2020, down from $3.1 million or 11 cents it earned a year ago. Earnings per share for the quarter missed the Zacks Consensus Estimate of 13 cents.
Revenues were $117.4 million for the reported quarter, down roughly 6% year over year. It also trailed the Zacks Consensus Estimate of $121.1 million. The top line was impacted by conservative procurement in the distribution channel, reduced commodity prices and a strained farm economy.
However, the company benefited in the reported quarter from its actions to manage operating expenses and optimize its manufacturing assets as well as lower interest and tax expenses.
American Vanguard Corporation Price, Consensus and EPS Surprise
American Vanguard Corporation price-consensus-eps-surprise-chart | American Vanguard Corporation Quote
Sales by Regions and Categories
Revenues from American Vanguard’s domestic crop business for the reported quarter fell roughly 12% year over year to roughly $48.4 million.
Sales from the domestic non-crop business went down 4% year over year to around $18.3 million.
Revenues from international businesses were essentially flat year over year at $50.8 million.
Financials
American Vanguard ended the quarter with cash and cash equivalents of roughly $9.6 million, up around 63% year over year. Long-term debt was roughly $149.4 million, down around 10% year over year.
Outlook
Moving ahead, American Vanguard said that it is witnessing greater optimism in the Agriculture sector, partly driven by rising prices for corn, soybeans and cotton that augurs well for improved grower profitability. The company is also seeing higher demand for its industry-leading soil fumigation products. The company is optimistic about its prospects for the fourth quarter and into the 2021 season barring unforeseen weather or pandemic factors.
Price Performance
American Vanguard’s shares are down 10.7% over a year, compared with the 3.5% decline of the industry it belongs to.
Zacks Rank & Key Picks
American Vanguard currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked stocks worth considering in the basic materials space include Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and B2Gold Corp. BTG.
Agnico Eagle has a projected earnings growth rate of 103.1% for the current year. The company’s shares have gained around 32% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold has an expected earnings growth rate of 96.1% for the current year. The company’s shares have surged around 64% in the past year. It currently carries a Zacks Rank #2 (Buy).
B2Gold has a projected earnings growth rate of 257.1% for the current year. The company’s shares have shot up roughly 89% in a year. It currently carries a Zacks Rank #2.
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