Andersons reports 90 percent drop in 3Q net income

Maumee, Ohio-Citing losses in its Plant Nutrient and Rail segments, The Andersons Inc. on Nov. 4 reported third-quarter net income of $1.3 million ($0.07 per diluted share), a 90 percent drop from last year’s $12.8 million ($0.70 per diluted share). Revenues for the quarter dropped 34 percent, to $601 million from last year’s $905.7 million. Nine-month earnings for the company were $22.1 million ($1.20 per diluted share) on revenues of $2.1 billion, compared with $66.3 million ($3.59 per diluted share) and $2.7 billion in the comparable period last year. The Plant Nutrient Group had an operating loss of $2.8 million on revenues of $70 million for the quarter, compared with operating income of $7.2 million on revenues of $162 million in last year’s third quarter. Margins were down significantly from last year, the company said, noting the “unprecedented inventory appreciation” that occurred in last year’s third quarter. “Retailers continue to maintain lower inventory holdings that led to reduced sales volume during the third quarter in comparison to the prior year,” the company said. Nine-month operating income for the Plant Nutrient Group was $9.6 million on $380 million in revenues, compared with $62.1 million on revenues of $541 million last year. The company again cited the “unprecedented margins” realized in 2008 by the group, which it said accounted for nearly two-thirds of the income for the same period. President and CEO Mike Anderson said the group experienced “a return to normal patterns following an extraordinary 2008.” The Rail Group had a third-quarter operating loss of $1.1 million on revenues of $21 million, down significantly from $5.2 million in earnings and $28 million in revenue during the same three-month period last year. The group saw double-digit declines in rail traffic, as well as lower profits from its leasing business. The Grain and Ethanol Group posted $8.9 million in operating income for the quarter, down from last year’s $9.4 million. The segment saw declines in grain business income, but improved margins in its ethanol business. The Turf and Specialty Group had a third-quarter operating loss of $0.3 million on $21 million of revenues, compared with last year’s loss of $0.5 million on revenues of $23 million. The Retail Group posted an operating loss of $2.3 million on revenues of $37 million in the third quarter, compared with last year’s operating loss of $0.2 million on revenues of $41 million. The Andersons touted its acquisition of Hartung Brothers Inc.’s Fertilizer Division (GM May 11, p. 12), which was completed in August. “This acquisition is allowing the group to expand its value added product offering, grow its wholesale customer base, and broaden its geographic territory,” the company said.