The Andersons earn record profits amid concerns on ethanol
05.11.2008 10:06
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- Source: toledoblade.com
Strong grain and fertilizer prices boosted earnings at The Andersons in the third quarter, but Wall Street fears about the company's involvement in the struggling ethanol industry helped push its share price down yesterday. Quarterly profits at the agribusiness, which is based in Maumee, rose 21 percent to a record $12.8 million, or 70 cents a share, the company said. That compared to $10.6 million, or 58 cents a share, for the same period last year. Strong grain prices, which have since fallen, contributed to a 64 percent increase in quarterly revenues to $906 million. Through Sept. 30, The Andersons has taken in $2.7 billion. "We're very pleased with the performance of the company," Gary Smith, company vice president for finance, said. "There are some things we'd like to see better. All in all, it was a good quarter." The earnings report was released after the close of stock markets. Earlier, The Andersons' share price slipped $2.37 cents, or 9 percent, to $23.29 in trading on the Nasdaq market. The drop occurred on an upbeat day on Wall Street when the Dow Jones Industrials Average gained 305 points or 3 percent. The drop in the Maumee firm's share price followed the company's announcement last month that it was reducing its forecast for annual earnings to $3.50 to $4 a share from a previous $5 to $5.40. In another key development affecting shares of The Andersons, uncertainty is growing in the ethanol industry. A key player, VeraSun Energy Corp., of Sioux Falls, S.D. filed for bankruptcy last week. The Andersons is an investor in several ethanol plants. In its earnings announcement yesterday, officials said quarterly profit from the company's investments in three such plants dropped $8.8 million to a loss of $2 million. Revenue from fertilizer sales played a major part in its improved quarterly report. Operating profit was $7.2 million, up from $800,000 in the third quarter of 2007. Officials cautioned, however, that fertilizer prices had begun to slip late in the third quarter. The firm's retail group, which includes stores in metro Toledo, Columbus, and Lima, reported an operating loss of $200,000 on slightly lower sales of $41 million.
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