American Vanguard Earnings: Here’s Why the Stock is Falling Now

American Vanguard Corp. (NYSE:AVD) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.12%.

American Vanguard Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 3.33% to $0.29 in the quarter versus EPS of $0.30 in the year-earlier quarter.

Revenue: Rose 2.31% to $86.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: American Vanguard Corp. reported adjusted EPS income of $0.29 per share. By that measure, the company missed the mean analyst estimate of $0.33. It missed the average revenue estimate of $93.93 million.

Quoting Management: Eric Wintemute, Chairman and CEO of American Vanguard, stated: “We are pleased to report strong first half performance despite unfavorable U.S. weather conditions throughout the Midwest and South. During the 2013 corn planting season, we continued to see strong demand for our corn soil insecticides and post emergent herbicide. While adverse weather conditions kept us from achieving stronger sales during the second quarter, nevertheless we recorded slightly higher revenues overall as compared to second quarter of 2012, which had set the previous Company record for second quarter sales. As we previously reported, during the second quarter, persistent rainfall delayed and compressed normal planting practices, causing some growers to make fewer crop protection applications at the time of planting or to switch from corn and cotton to plant soybeans, which require a shorter growing period. Strong sales of our corn products were offset by a drop in sales of both our cotton and peanut products, resulting primarily from a decline in planted acres of those crops. Further, we did see more conservative purchasing patterns towards the end of the second quarter, as distribution reacted to increasing inventory levels.”

Key Stats (on next page)…

Revenue decreased 28.58% from $121.54 million in the previous quarter. EPS decreased 50.85% from $0.59 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.35 to a profit $0.33. For the current year, the average estimate has moved down from a profit of $1.78 to a profit of $1.75 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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