Landec Earnings: Here’s Why Investors are Selling Shares Now

Landec Corp. (NASDAQ:LNDC) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 5.42%.

Landec Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 5.88% to $0.18 in the quarter versus EPS of $0.17 in the year-earlier quarter.

Revenue: Rose 7.26% to $109.48 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Landec Corp. reported adjusted EPS income of $0.18 per share. By that measure, the company missed the mean analyst estimate of $0.23. It beat the average revenue estimate of $108.62 million.

Quoting Management: “Despite weather-related produce sourcing issues in our Apio food business, the company exceeded its revenue plan and met its operating income plan for the quarter,” commented Gary Steele, Landec’s Chairman and CEO. “The contribution to net income of $5.4 million during the quarter from the change in the fair market value of our investment in Windset Farms was $2.3 million lower than we had budgeted strictly because of a change in the timing of income recognition. This will result in approximately $0.06 per share shifting from the first quarter to the remaining three quarters of fiscal 2014. While a change in the fair market value of an investment is difficult to predict, per our original guidance for fiscal 2014, we continue to expect to recognize a 35% to 40% increase in the fair market value change of our Windset investment compared to the fair market value change in fiscal 2013.

Key Stats (on next page)…

Revenue increased 2.21% from $107.11 million in the previous quarter. EPS increased 5.88% from $0.17 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 $0.25 to a profit $0.19. For the current year, the average estimate has moved down from a profit of $0.89 to a profit of $0.85 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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