Andersons 2Q profits down 35% from 2011

Led by record revenues from its Rail Car group, The Andersons Inc. on Thursday reported second-quarter profits of $29.2 million, or $1.56 per share, on revenues of $1.3 billion.

Although the Rail group and the company's Plant Nutrient group posted higher revenues from a year ago, overall The Andersons' earnings were down 35 percent from the same period a year ago when it had profits of $45.2 million, or $2.42 per share.

But the Maumee agribusiness said 2011's second-quarter earnings were substantially boosted by an outstanding performance by its Grain group, whose income from the leasing of space for wheat soared. That kind of performance a year ago was considered extraordinary and unlikely to be repeated this year as the company returned to more normal rental space income.

Such was the case, as the Grain group had second-quarter operating income of $15.3 million, which compared with $36.5 million for the same quarter a year ago.

The Grain group did benefit from record earnings from its investment in the Lansing Trade Group grain business, but the company said it was the Rail group that helped keep earnings from sliding farther.

The Rail group had operating income of $7.2 million. A year ago, its income was $2.8 million. The company said the division's gains were attributable mainly to an increase in the average lease rate of The Andersons' fleet of rail cars, the demand for which remained steady from last year at a usage rate of about 85 percent.

The Andersons' Plant Nutrient group had operating income of $28 million, compared with $24.1 million a year ago. The increase in income was due largely to higher sales volumes, the company said.

In addition to the expected lower income by the Grain group, the company's second quarter performance was hurt by its Ethanol group, which had an operating income loss of $2.1 million. Last year, the group had second-quarter earnings of $8.8 million.

The Andersons said the Ethanol group was hurt by a decrease in earnings from the company's investments in other ethanol facilities, who in turn were hurt by higher corn costs and lower demand for ethanol.

"We had a good quarter, although our expectations for the remainder of the year have been tempered by the drought conditions currently being experienced, which will certainly impact our grain and ethanol businesses," Mike Anderson, the company's chief executive officer, said in a statement.

"Although the results of our Ethanol group have declined, given the current ethanol margin environment, we feel the results demonstrate that our business structure, including co-products, services, and equity partners, perform much better in a down market then the general industry. I am particularly proud of the Rail group's record results this quarter as well as [the Plant Nutrient] group's strong results, which continue to demonstrate the portfolio benefits of our business mix," Mr. Anderson said.

The company's other two divisions had mixed results. The Turf & Specialty group income rose to $2.8 million, compared with $1.8 million a year ago. But the Retail group had income of $1.4 million, down from $1.9 million a year ago.

The company reported its earnings after the market closed. The Andersons' stock, which is traded on the Nasdaq market, closed at $37.45 Thursday, up 27 cents.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.