Bolstered by record earnings from its ethanol group, The Andersons Inc. on Tuesday reported that its 2013 profits rose 13 percent to $89.9 million, or $3.18 a share, on revenues of $5.6 billion.
That compared with 2012 profits of $79.5 million, or $2.82 a share. Its 2012 revenues were $5.3 billion.
“I am proud of our 2013 results and the team we have here at The Andersons,” Chief Executive Mike Anderson said. “The ethanol group had exceptional results; they worked to simultaneously optimize margins, yields, production rates, and co-product sales. Quite simply, the ethanol group hit the ball out of the park.”
The company had a strong fourth quarter, with profits of $30.7 million, or $1.08 per share, on revenues of $1.6 billion. For the same period in 2012, it had profits of $15 million, or 53 cents per share, on revenues of $1.7 billion.
While the agribusiness was pleased with its yearly and quarterly performance, it fell short of Wall Street's expectations. Analysts had estimated the company’s 2013 earnings would be $4.77 a share, and its fourth quarter earnings $1.61 a share. Full-year revenues were estimated to come in at $5.65 billion, instead of the actual $5.6 billion, while fourth quarter revenues were expected to be $1.74 billion, instead of the actual $1.6 billion.
On the Nasdaq, The Andersons’ shares gained 83 cents to close at $86.19 a share. Its earnings were released after the markets closed.
For 2013, the company’s ethanol group had operating income of $50.6 million, compared to a loss of $3.7 million in 2012. The company said the rise in operating income was because of higher ethanol margins created by solid demand for ethanol exports, and also by lower costs for feed corn used to make ethanol.
The Andersons said its ethanol plants also benefited from improved production rates and increased sales of by-products, such as corn oil, E-85 gasoline, and distillers dried grains that are used to feed cattle.
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The company said its rail group had operating income of $46.8 million, the same as 2012, while its turf and specialty group had a record operating income of $4.7 million, up from $2.2 million a year ago.
The Andersons’ plant nutrient group’s operating income was $27.3 million, down from $39.3 million a year ago, while the retail group had an operating loss of $7.5 million, but that included $4.7 million in one-time costs. Excluding those costs, the company said its performance was consistent with 2012 when the retail division lost $4 million.
The company’s grain group, its largest division, had a disappointing performance overall. Its operating income was $46.8 million, a drop of 26 percent from 2012 when it was $63.6 million.
The Andersons said the grain group’s performance was due partly to lower income from rentals of its grain storage space, a factor attributed to the nationwide drought in 2012. The grain group did see increased gross profits on grain sales. And revenues overall by the group increased from greater sales volume. But the division’s overall performance slipped because the average price of grain declined.
“Despite the unfavorable impacts of the 2012 drought, the grain group had good results, in part due to the strong earnings of [our] Lansing trade group,” Mr. Anderson said. The Lansing trade group sells commodities such as whole grains, feed ingredients, energy products, and freight within North America but also internationally.
Contact Jon Chavez at: email@example.com or 419-724-6128.