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American Vanguard (AVD) Q4 Earnings Top, Sales Lag Estimates

Zacks

American Vanguard Corporation AVD recorded profit of $7.4 million or 25 cents per share for the fourth quarter of 2018, down around 12% from $8.4 million or 28 cents it earned a year ago. Results in the year-ago quarter include a one-time tax benefit of $3.4 million. Earnings per share for the reported quarter surpassed the Zacks Consensus Estimate of 23 cents.

Revenues rose around 13% year over year to $131 million in the reported quarter. Sales, however, fell short of the Zacks Consensus Estimate of $132 million.

For full-year 2018, profit was $24.2 million or 81 cents per share, up roughly 19% from $20.3 million or 68 cents recorded in 2017.

Net sales for 2018 jumped roughly 28% year over year to $454 million driven by the contributions from acquisitions completed last year.

The company’s net sales from the United States went up 17% year over year to $300.3 million in 2018 while international revenues shot up around 56% to roughly $154 million.

American Vanguard Corporation Price, Consensus and EPS Surprise

American Vanguard Corporation Price, Consensus and EPS Surprise | American Vanguard Corporation Quote


Segment Highlights

Revenues from American Vanguard’s insecticides business for the full year rose roughly 12% year over year to $150.6 million.

Sales from the herbicides/soil fumigants/fungicides business surged around 47% to $183.4 million in 2018.

Revenues from the other business, including plant growth regulators jumped 37% to $58.4 million for the year.

Sales from the non-crop business rose around 16% to $62 million in 2018.

Financials

American Vanguard ended 2018 with cash and cash equivalents of roughly $6.2 million, down around 45% year over year. Long-term debt was $96.7 million, up around 25% year over year.

Outlook

Going forward, American Vanguard expects acquisitions to drive its growth in 2019. It also sees strong demand for its products both domestically and internationally.

The company expects its global revenues to exceed $500 million in 2019. American Vanguard also expects its product mix and manufacturing performance to enable it to deliver gross profit margins in the range of 38-40%.

Price Performance

American Vanguard’s shares have rallied 24.7% over the past three months, outperforming the 11.3% rise of the industry it belongs to.



Zacks Rank & Stocks to Consider

American Vanguard currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. KL, Israel Chemicals Ltd. ICL and Franco-Nevada Corporation FNV.

Kirkland Lake Gold has an expected earnings growth rate of 47.1% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have shot up around 130% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2. The company’s shares have gained around 13% over the past year.

Franco-Nevada has an expected earnings growth rate of 10.3% for the current year and carries a Zacks Rank #2. Its shares have gained roughly 14% in the past year.

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