The Anderson’s, Inc. (ANDE) is expected to report second-quarter results next week after beating the Zacks Consensus Estimate by 28 cents in the first quarter. Can it keep the momentum? Analysts are expecting 19.55% year over year earnings growth in 2009.

Company Description

The Anderson’s is a diversified agribusiness company with interests in grain and plant nutrients, railcar leasing and repair, industrial products formulation, turf products, retailing and ethanol operations. The company has operations in 12 states and Puerto Rico as well as rail equipment leasing interests in Canada and Mexico.

Zacks Consensus Estimates Rise Ahead of Earnings

The Andersons is scheduled to report second quarter results next week on Aug 6. Ahead of the earnings report, Zacks Consensus Estimates have been rising.

In the last week, the second-quarter Zacks Consensus Estimate rose 5 cents to 90 cents with 1 out of 4 covering analysts raising.

The full-year Zacks Consensus Estimate jumped 7 cents to $2.14 per share.

The company used to provide earnings guidance but in its first quarter report it decided to not release a forecast for the year.

Increasing Grain Storage Capacity

The Andersons has recently been expanding its grain storage capacity with a strategy of serving more customers within the Eastern Corn Belt.

On July 29, the company announced it had added another 4 million bushels of capacity at two south-central Michigan facilities. It is also currently working on expanding capacity at facilities in Delphi, Indiana and White Pigeon, Michigan which, when completed in the next few months, will increase capacity at each facility by 750,000 bushels.

The additions will bring the Grain Division’s total capacity to more than 101 million bushels.

ANDE Surprised in the First Quarter

Despite the tough economic conditions, The Andersons still beat the Zacks Consensus Estimate by 28 cents reporting earnings per share of 27 cents when the Zacks Consensus Estimate called for a loss of 1 cent.

Revenue, however, did drop to $697 million from $713 million.

The grain business was a positive in the quarter, as its operating income rose to $5.7 million from $2.2 million. Also seeing growth was the Turf & Specialty Group which saw revenue rise to $45 million from $40 million in the year ago period as turf products tonnage increased 13% year over year.

The Andersons Continues Dividend Tradition

On May 8, the company announced it would pay its 51st consecutive quarterly dividend of 8.75 cents which was payable on Jul 22 to shareholders of record as of Jul 1. It currently has a yield of 1.10%.

It has been paying dividends since it listed on the Nasdaq in 1996.

Value Fundamentals

The Anderson’s is a Zacks #1 Rank (strong buy) stock. It is trading on the upper end of the value category, with a forward P/E of 15.6. But its price-to-book ratio is just 1.55. The company also has a stellar 5-year average return on equity (ROE) of 17.42%.

Zacks Investment Research
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