Why Is Andersons (ANDE) Up 6.4% Since the Last Earnings Report?
A month has gone by since the last earnings report for The Andersons, Inc. ANDE. Shares have added about 6.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Andersons Q1 Earnings in Line
Andersons reported adjusted earnings of $0.07 per share in the first-quarter 2017. The company had reported a loss of $0.52 in the prior year quarter. Earnings came in line with the Zacks Consensus Estimate.
Including one-time items, the company had posted a loss of $0.11 in the quarter, compared to a loss of $0.52 in the year-ago quarter.
Operational Update
Revenues in the reported quarter declined 4% year over year to $852 million.
Cost of sales fell 5.4% to $775.6 million from $820 million in the prior-year quarter. Gross profit increased 12.8% year over year to $76.5 million. Consequently, gross margin expanded 140 basis points to 9% in the quarter.
Operating, administrative and general expenses went up 2.6% year over year to $82 million. Andersons posted operating loss of $5.6 million in the quarter, compared with $22.9 million in the year-earlier quarter.
Segment Performance
The Grain Group: Revenues went down 11% year over year to $478.5 million from $538.8 million in the year-ago quarter. The segment reported an operating loss of $5.1 million comparedto a loss of $17.4 million in the year-ago quarter.
The Ethanol Group: Revenues increased 34% year over year to $154 million. The segment reported an operating profit of $1.8 million, as against a loss of $3.6 million in the comparable quarter in the prior year.
The Plant Nutrient Group: The segment reported revenues of $146.6 million, down 12% year over year. The segment reported an operating income of $6.7 million compared with $1.7million in the year-ago quarter.
The Rail Group: Revenues climbed 2% year over year to $40.4 million. Operating income declined 35% to $6.1 million from $9.4 million in the prior-year quarter.
Retail Group: Revenues increased 16.5% year over year to $32.4 million. The segment reported an operating loss of $6.8 million, compared with $2.1 million in the year-ago quarter.
Financial Performance
Andersons reported cash and cash equivalents of $29.6 million at the end of the first quarter 2017, down from $46.3 million in the prior year quarter. Long-term debt was $366 million as of Mar 31, 2017, compared with $402.4 million as of Mar 31, 2016.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted downward by 22.6% due to these changes.
The Andersons, Inc. Price and Consensus
The Andersons, Inc. Price and Consensus | The Andersons, Inc. Quote
VGM Scores
At this time, Andersons' stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We are looking for a below average return from the stock in the next few months.
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