SANW - S&W Seed stock slips on wider than expected loss

S&W Seed shares ( NASDAQ: SANW ) slid sharply on Monday after posting a wider than expected loss despite marked margin improvement.

S&W Seed ( SANW ) posted a $0.13 per share loss for the fiscal second quarter, missing expectations by $0.01, while $12.94M in revenue narrowly exceeded estimates . A 21.3% GAAP gross profit margin reflected an 820 basis point improvement from the prior year quarter.

"During the second quarter of fiscal 2023, we maintained our diligent focus on commercial execution to achieve our goals of driving growth, improving gross margins and reducing operating expenses,” the company said. “We saw strong growth in Double Team sorghum revenue due to early season sales in the U.S. as well as growth in international alfalfa sales due to improved conditions in MENA, an improvement to gross margins of 820 basis points due in part to Double Team as well as improved international alfalfa margins, and a $1.9 million year-over-year improvement in adjusted EBITDA."

Management also highlighted a new joint venture with Shell ( SHEL ) that it believes will be “transformational” for the company. The company reiterated its previous guidance despite the new partnership.

The Company expects fiscal 2023 revenue to be within a range of $80M to $92M against a consensus of $87.05M. Management expects an adjusted EBITDA in the range of $7M to $2M as compared to a $23.8M loss in 2022.

Shares of S&W Seed ( SANW ) slid over 10% shortly after the market open before rebounding to a more modest loss in morning trading.

Read more on the details of the earnings results .

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