Zacks Investment Research downgraded Darling International Inc. (DAR) to a Zacks Rank #5 (Strong Sell) on Aug 29, 2013.
Why the Downgrade?
Darling International reported a disappointing second quarter 2013 financial results on Aug 8, 2013. The company’s share price since then has dropped by 2.3%. Net earnings per share in the quarter fell 29.0% year over year to 22 cents and 18.5% below the Zacks Consensus Estimate of 27 cents.
Revenue in the quarter was down 3.0% year over year due to lower finished product prices for fats. Talking of expenses and margins, total costs and expenses in the quarter increased 22.8%. Slight decline in cost of sales and operating expenses were offset by increases in SG&A expenses and depreciation and amortization.
Operating margin in the quarter was 12.0%, down 260 basis points from 14.6% in the year-ago quarter.
Darling International has a negative earnings surprise average of 19.3%. Also, in the last 30 days, the Zacks Consensus Estimate for the company has gone down by 5.2% to $1.09 for 2013 and has declined 5.0% to $1.33 for 2014.
Other Stocks to Consider
Darling International is a well known provider of rendering and bakery residuals recycling solutions to the nation's food industry. The company currently has a market capitalization of $2.4 billion.
Other stocks to watch out for in the industry are The Andersons, Inc. (ANDE) and Progressive Waste Solutions Ltd. (BIN), each with a Zacks Rank #1 (Strong Buy) while Sharps Compliance Corp. (SMED) comes with a Zacks Rank #2 (Buy).
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