During the second quarter of 2017, the company recorded a non-cash and nondeductible goodwill impairment charge of $42 million or $1.48 per share related to the Plant Nutrient segment, which of course was stripped out of the $0.54 number. When adding this charge in, the company reported a loss of ($0.94) per share.
On the top line, revenues fell 6.6% year/year to $993.7 million, which also fell short of expectations.
Looking over in its Grain Group...
For the third successive quarter, the company's Grain Group recorded significantly improved year-over-year results.
The second quarter improved by approximately $20 million, primarily because the group continued to earn better space income. These results have transpired even as low grain prices have discouraged growers from selling old crop corn, and the market is encouraging the group to hold grain to earn storage income farther into the season. The Grain Group's affiliates also improved their performance year-over-year.
Moving over to its Ethanol Group...
Ethanol margins were lower year-over-year for the quarter as supply outpaced demand, and the group is still dealing with both vomitoxin-related discounts and otherwise low distilled dry grain with solubles values relative to corn.
The company says its ethanol segment is operating well in a challenging environment.
The four ethanol plants combined for second quarter and first half production records of more than 116 million and 214 million gallons, about 19% and 12% over the comparable periods in 2016, respectively, in part because the new Albion capacity came on line in March, 2017.
Looking at the Rail Group...
The Rail Group's base leasing income and utilization improved sequentially, perhaps signaling a modest market upturn. The company has closed its four retail stores and have now incurred most of the costs of exiting the business.
In the The Plant Nutrient Group...
The Plant Nutrient Group's margins and volumes both suffered from persistently low prices and fieldwork delays during a key stretch of the primary fertilizer application window. Recent performance and continued softness in the broader fertilizer market resulted in a write-down of goodwill associated with the wholesale fertilizer business.
Fieldwork delays persisted well into the quarter in the Eastern Corn Belt and through most of the primary application window, further pressuring historically low margins, especially in the value added product segment.
The quarter was characterized by low prices, oversupply and unstable markets. Base nutrient volumes were down about three percent year-over year, while higher-margin value added nutrient tons (low salt starter fertilizers, micro nutrients) were down 12%. Volumes for products in the group's other businesses (Farm Centers, Lawn and Cob) were flat.
Clearly a lot going on at The Andersons. As a result, the stock is only down $0.30 at $33.70/share currently.