Shares for publicly traded agribusiness Limoneira gained 5.26 percent in trading Jan. 14, after the firm reported better-than-expected financial results and a strong outlook for 2020.
Revenue fell 32 percent compared to the prior year to $171.4 million, as it dealt with unpredictable weather, power outages, price pressures and a significant decline in its avocado crop.
“Even with these temporary challenges, we generated positive EBITDA and adjusted EBITDA, closed a strategic acquisition and are very well positioned to continue our market share growth and return to strong EBITDA and adjusted EBITDA results in fiscal 2020,” CEO Harold Edwards said in a news release.
The Santa Paula citrus grower and packer had dialed back expectations a few weeks prior, saying it expected around $170 million in revenue, and up to $3 million in earnings before taxes, depreciation and other costs. Adjusted earnings came to $1.9 million for the full fiscal year, for a net loss of $6.5 million, or 37 cents per share.
Costs and expenses nearly doubled in the fourth quarter to $40.1 million, gaining 50 percent for the full fiscal year to $176.9 million. The gains were concentrated among its agribusiness division, including expenses related to its recent acquisition in Argentina and harvest, packing and other costs from a higher volume of lemons from third-party growers.
Fourth quarter net loss of $3.2 million, or 24 cents per share, was in line with Zacks analyst estimates. The company said it expects to sell 7.5 million to 9.5 million cartons of fresh lemons in 2020, much of it in the domestic market. Adjusted earnings are expected to be in the range of $22 million to $26 million, Limoneira said.
Shares shot up as high as $21.57 in midday trading Jan. 14, ending at $20.43.
Limoneira also said it expects new acreage of lemons to come online beginning in 2020, including a 50 percent increase in Limoneira-owned lemons after 2020. It also forecast growth in third-party supply and hinted at potential acquisition opportunities in a “highly fragmented” industry. “Our strategic joint venture and land acquisition in Argentina with FGF Trapani completed in fiscal 2019 expands our global client reach and enables us to provide our customers with a year-round supply of citrus,” said Senior Vice President Alex Teague, adding that the relationship has been “instrumental in growing our international and domestic customer base.”
• Contact Marissa Nall at [email protected]