American Vanguard Corporation (NYSE:AVD) posted profit of $3.2 million or 11 cents per share for the third quarter of 2019, down around 51% from $6.5 million or 22 cents it earned a year ago. However, earnings per share for the quarter topped the Zacks Consensus Estimate of 9 cents.
The bottom line in the reported quarter was hurt by increased operating expenses and reduced factory activity. The results in the year-ago quarter were also favorably impacted by higher benefit associated with the reassessment of deferred purchase price consideration.
Revenues went up around 12% year over year to $124.9 million in the reported quarter. It surpassed the Zacks Consensus Estimate of $123 million. Sales were driven by the company’s international business.
Total U.S. sales went up 3% year over year in the reported quarter. Sales from the U.S. crop business edged up 1% year over year while sales from U.S. non-crop business rose 10%. Extreme weather conditions impacted American Vanguard’s domestic business in the quarter.
The company's international business saw a 27% increase in sales in the third quarter. The company witnessed growth across Central America, Brazil, Mexico and Canada.
Segment Highlights
Revenues from American Vanguard’s insecticides business for the quarter rose around 15% year over year to $35.8 million.
Sales from the herbicides/soil fumigants/fungicides business went up 12% to $46.8 million.
Revenues from the other business, including plant growth regulators, rose 2% to $22.9 million.
Financials
American Vanguard ended the quarter with cash and cash equivalents of roughly $5.9 million, down around 37% year over year. Long-term debt was $165 million, up around 70% year over year.
Outlook
American Vanguard envisions its consolidated sales for 2019 to increase 5% year over year with mixed results in its key markets. It also expects international sales to rise roughly 25%.
The company sees net sales for 2019 of $475 million. It also expects its gross profit margins to be 38% for 2019.
Price Performance
American Vanguard’s shares are up 4.5% so far this year, compared with the 19.2% rise of the industry it belongs to.
Zacks Rank & Key Picks
American Vanguard currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks worth a look in the basic materials space include Agnico Eagle Mines Limited (NYSE:AEM) , Kirkland Lake Gold Ltd. (TSX:KL) and Franco-Nevada Corporation (TSX:FNV) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle has a projected earnings growth rate of 168.6% for the current year. The company’s shares have rallied 70% in a year’s time.
Kirkland Lake Gold has projected earnings growth rate of 96.3% for the current year. The company’s shares have surged around 140% in a year’s time.
Franco-Nevada has estimated earnings growth rate of 39.3% for the current year. The company’s shares have shot up roughly 51% in a year’s time.
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American Vanguard Corporation (AVD): Free Stock Analysis Report
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Franco-Nevada Corporation (FNV): Free Stock Analysis Report
Kirkland Lake Gold Ltd. (KL): Free Stock Analysis Report
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