ANDE - Andersons stock gains 14% on profit beat strong cash flow

Andersons ( NASDAQ: ANDE ) shares gained 14% on Wednesday after the agriculture company beat profit expectations with its fourth quarter results and reported strong operating cash flows.

The company generated adjusted net income from continuing operations of $34M, or $0.98 per diluted share, with adjusted EBITDA of $104M.

Revenue was $4.68B, up 23.7% Y/Y, particularly driven by record income in the Trade segment. Trade reported record adjusted pretax income of $52M (vs. $27M in Q4/2021), driven by strong elevation margins and merchandising.

"We finished the year with strong fourth quarter results, particularly in our Trade segment. Our merchandising teams and grain assets had outstanding results from improving basis after harvest, sales into destinations experiencing crop deficits, storage income and rising propane values. With another record quarter, our Trade business is positioned to execute well in these favorable markets with continuing strong ag fundamentals," said President and CEO Pat Bowe.

The Renewables segment reported pretax income attributable to the company of $13M vs. $27M in the same period of the prior year. The drop was attributed to ethanol board crush margins for the 2022 fourth quarter that were down over $0.90/gallon from the very strong fourth quarter of 2021.

The Plant Nutrient segment had mixed results with good fall applications and farmer engagement on specialty liquids but more limited early orders of granular fertilizer.

The company ended the year with a strong balance sheet and a long-term debt to EBITDA ratio well below its target of 2.5 times.

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