The Andersons Inc. on Nov. 1 announced third-quarter net income of $8.4 million ($0.51 per diluted share) and total revenues of $336 million, compared with a net loss of $0.6 million ($0.04 per share) on revenues of $289 million in the comparable year-ago quarter. For the first nine months of 2006, the company’s net income was $22.6 million ($1.41 per diluted share) on revenues of $995 million, compared with $10.8 million ($0.70 per share) and $913 million, respectively, in 2005.
The 2006 third-quarter and nine-month results both established new records, the company said, noting that all the earnings-per-share data had been adjusted to reflect the June 2006 stock split. During the third quarter, the company raised $81.6 million of additional equity to support its growth initiatives and strengthen its balance sheet.
Broken down by unit, the company’s Plant Nutrient Group incurred a third-quarter operating loss of $1.9 million on $39 million of revenues, compared with a loss of $0.8 million and revenues of $47 million in the comparable year-ago quarter. Citing higher energy and nutrient input costs, the company said farmers reduced the amount of nutrients applied to their fields this season. “This resulted in reduced wholesale and retail demand for plant nutrients and a deferral of pre- fall season purchasing,” the company said. “With volume down, the group’s third-quarter gross profit declined from last year.” Nine-month results for the segment included operating income of $1.9 million on revenues of $198 million, compared with $8.7 million and $211 million, respectively, in 2005.
The Grain and Ethanol Group saw third-quarter operating income of $12 million on revenues of $209 million, up $14.5 million and $50 million, respectively, from 2005. Year-to-date operating income for the segment was $15.7 million, compared with an operating loss of $2.1 million in the first nine months of 2005. Construction of an ethanol plant in Albion, Mich., in which The Andersons is a significant investor, was completed during the third quarter. Construction of another ethanol plant, located in Clymers, Ind., is underway and scheduled to start production by the end of the first quarter of 2007, the company said.
The company’s Rail Group reported third-quarter operating income of $4.9 million, down $0.9 million from last year, due in part to higher fleet maintenance costs. Third-quarter revenues for the segment were $27 million, up $4 million from last year. Nine-month results for the segment included revenues of $90 million and income of $16.1 million, compared with $59 million and $13.3 million, respectively, in 2005.
The company’s Turf and Specialty Group saw improved third-quarter and year-to-date results due to restructuring actions and other charges in 2005, while the Retail Group also posted higher revenues in the 2006 periods due to increases in same-store sales, along with higher gross margins and total gross profit.
“With our strong third-quarter income this year, one might conclude that our prospects for the full year had noticeably improved,” said President and CEO Mike Anderson. “There are several variables which could still swing either way. Supply and demand dynamics in the grain markets, including rainfalls that have delayed the fall harvest, will impact fourth quarter income. Accordingly, I believe that our previously-announced guidance of $1.90 to $2.10 for our 2006 full-year earnings per diluted share is still a reasonable expectation.”