Maumee, Ohio-The Andersons Inc. on Nov. 4 announced third-quarter net income of $12.8 million ($0.70 per diluted share) on revenues of $906 million, up from last year’s net income of $10.6 million ($0.58 per diluted share) on $554 million in revenues. For the first nine months of 2008, the company’s net income was $66.3 million ($3.60 per diluted share) on revenues of $2.7 billion, versus $45.3 million ($2.48 per diluted share) on revenues of $1.6 billion in the comparable year-ago period. The company’s Plant Nutrient Group had a record third-quarter operating income of $7.2 million on revenues of $162 million, compared with last year’s $0.8 million in operating profit on $77 million of revenues. The Andersons said the group’s third-quarter earnings were impacted both positively and negatively by fluctuating fertilizer prices. Significant margin increases were recognized on sales made during the quarter due to the inventory appreciation that occurred as a result of rising prices, the company said. Certain inventory values, however, declined sharply late in the third quarter and into the fourth quarter, resulting in $13.1 million in adjustments due to adverse purchase commitments and lower of cost or market adjustments. Sales volume during the quarter was slightly above the prior year. The group’s nine-month operating income was $62.1 million on $541 million of revenues, compared with operating income of $18.4 million on revenues of $326 million during the first nine months of 2007. “Our third quarter and nine month results are both records, however, we were disappointed by the sudden turn of events in the fertilizer markets,” said President and CEO Mike Anderson. “The Plant Nutrient Group contributed significantly to our income during the period, however, our expectations for the group were even higher before the recent sharp decline in global fertilizer prices that led to material inventory adjustment.” The company’s Grain & Ethanol Group saw a reduction in third-quarter operating income, to $9.4 million from last year’s $13.7 million. Income from the ethanol business declined $8.8 million during the third quarter to a loss of $2.0 million, due primarily to the combined performance of the company’s investments in three ethanol limited liability companies. The Rail Group posted operating income of $5.2 million in the third quarter on revenues of $28 million, compared with $5.8 million and $34 million, respectively, in the year-ago quarter. The Retail Group reported revenues of $41 million for the third quarter of 2008, slightly below last year’s $42 million due to the overall decline in consumer spending. The Turf & Specialty Group posted a third-quarter operating loss of $0.5 million on $23 million of revenues, compared with a loss of $1.6 million on $18 million of revenues in last year’s quarter. “Our current guidance is $3.50-$4.00 per diluted share,” Anderson said. “As we noted in the second quarter press release, our former guidance was heavily influenced by the reported and expected performance of our Plant Nutrient Group. This is again true of our current guidance, which is primarily attributed to the aforementioned decline in global fertilizer prices. The current guidance is also partially attributable to the economics in the ethanol industry.”
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