Santa Paula-based agribusiness Limoneira released preliminary financial results on Aug. 24 for its most recent quarter, highlighting strong fresh lemon utilization which helped offset a smaller-than-expected avocado output.
Limoneria said it expects revenue of $49 million in the third quarter of 2021, which would be a slight decrease from the same quarter a year ago, when the company generated $53.6 million in revenue. Despite the revenue drop, Limoneira said it expects earnings per share to be in the range of 18 cents to 23 cents for the quarter ended July 31, above its earnings of 12 cents per share in the same quarter of 2020.
Agribusiness in general contributed $48 million in revenue in the third quarter, also down slightly from the same quarter last year, when it produced a total of $52.4 million.
Limoneira’s stock took a tumble after the markets closed on Aug. 24, but the it recovered to open at $16.95 on Aug. 25, just 10 cents below the previous day’s close.
CEO Harold Edwards said in a news release that Limoneira saw global logistical delays during the third quarter of 2021, delays that are affecting the agriculture industry as a whole. As a result, the company decided to not issue guidance on its output for the fourth quarter of 2021, as the COVID-19 pandemic continues to affect the food service industry.
“Even with these temporary challenges, we increased our operating income by approximately 80% in the quarter compared to the prior year and continued to perform extremely well in retail food and club grocery, with a gradual improvement in domestic food service,” Edwards said in the release.
Additionally, a poor rainfall season led to smaller-than-expected avocado sizing, affecting the company’s total forecasted volume of avocados in California.
During the first nine months of the fiscal year, Limoneira has sold about 5.65 million pounds of avocados at an average price of $1.20 per pound. The volume was much lower than the company anticipated.
Lemon sales were strong, though, as Limoneira sold 1.1 million domestic lemon cartons in the third quarter of 2021 at approximately $21.35 per carton sold. The company sold 1.4 million domestic lemon cartons in the same quarter a year ago, but the average selling price was about $18.22, leading to a lower profit.
So far this fiscal year, Limoneira has sold 4 million domestic lemon cartons at an average price of $19.90 per carton.
Harvest at Limoneira, the company’s real estate development project in Santa Paula, has now closed 556 lots, including 92 new lot closings during the third quarter of 2021.
Edwards said Limoneira expects to generate $80 million in revenue over the next six years from the project, beginning in 2022, when it expects $3 million in revenue. In 2023, the company projects real estate development revenue of $15 million, rising to $27 million by 2024.
Edwards said the company also believes there is even bigger potential upside due to the increased number of sellable lots.
Limoneira recently announced it plans to sell 25 acres of its land in Santa Paula to be used as a new acute care public hospital for the county of Ventura.
A company called Pacific Coast Investments plans to buy the land in five staged purchases. The first purchase, Lot 1, would be designated for a medical office, while the second purchase, Lot 2, would be for the new hospital, which would replace the county’s existing Santa Paula Hospital.
Limoneira will release its full third quarter 2021 results on Sept. 8.