Wednesday, May 1, 2013

Green Plains Swung to First-Quarter Profit on Stronger Margins

By Kristin Jones
Green Plains Renewable Energy Inc. (GPRE) swung to a first-quarter profit as the ethanol producer was helped by stronger margins.
Shares jumped 11% in after-hours trading Tuesday to $13.90 as results exceeded Street expectations. Through the close Tuesday, the stock was up 58% so far this year.
Green Plains, the fourth-largest ethanol company in the U.S., had struggled along with other ethanol producers to support its margins against high grain prices and sluggish gasoline demand. The company late last year sold its 12 grain-storage facilities in Iowa and Tennessee to Andersons Inc. (ANDE).
Chief Executive Todd Becker said that ethanol margins have lately improved, due to increased industry production, and inventories have been drawn steadily down over the past several months.
He added that current-quarter earnings are expected to improve compared with the latest quarter.
For the latest period, the company reported a profit of $2.56 million, or eight cents a share, compared with a year-earlier loss of $12.7 million, or 39 cents a share. The year-ago period included a $2.4 million charge from a legal settlement.
Revenue edged down 1.3% to $765.5 million.
Analysts polled by Thomson Reuters were expecting a loss of a penny a share on revenue of $746 million.
Gross margin widened to 3.6% from 1.1%.