| Business Briefs - May 21, 2008 |
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Co. starts Hoosier ethanol plant
LOS ANGELES, Calif. — AltraBiofuels, a California-based ethanol producer, announced it has started production at its Cloverdale, Ind., ethanol plant.
The Cloverdale plant uses a dry grind corn process with continuous fermentation. Its rated capacity is 84 million gallons per year (MGPY) of anhydrous ethanol and the plant is currently permitted to expand production to 110 million gallons per year of anhydrous.
The plant is anticipated to benefit from the region’s extensive dairy cow population and the area’s competitive transportation advantage, with excellent rail and truck access to both Midwestern and southern fuel distribution centers.
AltraBiofuels’ 60 MPGY Coshocton, Ohio, plant began corn ethanol production in February. With the completion of the Cloverdale plant, AltraBiofuels presses forward with its stated goal of producing hundreds of millions of gallons of ethanol, employing state-of-the-art facilities that can start by processing corn, but be readily upgraded to cellulosic technologies.
Deere quarterly profit rises
ST. LOUIS, Mo. (AP) — Deere & Co. said May 14 its second-quarter profit rose 22 percent, propelled by lofty crop prices that stoked global demand for its farm equipment despite a faltering U.S. economy.
But the Moline, Ill.-based company warned that rising costs of such raw materials as steel could cut into its earnings over coming months, sending its shares down nearly 10 percent Wednesday.
Deere also said it was seeing spot parts shortages.
The maker of tractors and harvesting machinery said its profit for the period ended April 30 jumped to $763.5 million, or $1.74 per share, up from $623.6 million, or $1.36 per share, during the same period last year. Deere said sales rose to $8.1 billion from $6.9 billion a year ago. The company said its sales outside North America soared 46 percent during the quarter, dwarfing the 6 percent jump of its sales in the U.S. and Canada.
Analysts surveyed by Thomson Financial had expected earnings of $1.75 per share on sales of $7.6 billion. The earnings estimates typically exclude one-time items.
Although Mike Mack, Deere’s chief financial officer, told analysts the sales and earnings were the company’s highest ever for any quarter, Deere’s shares slid as some analysts wondered aloud whether Deere had lost some momentum.
“Deere had really been leaping over earnings estimates for years, and that came to an end today,” said Matt Collins, an analyst at St. Louis-based Edward Jones. “It was a good solid quarter, but investors were looking for more.”
Deere has benefited from higher farm prices around the world that have been fueled by increased ethanol production, and farmers benefiting from higher grain commodity prices are upgrading their equipment. Deere also is enjoying an export boom as the dollar’s decline overseas makes its products cheaper in most markets beyond North America.
The company said it expects third-quarter and full-year sales to rise about 20 percent, sticking with what some analysts consider its conservative forecast that earnings would be $550 million-$575 million during this quarter and about $2.2 billion for the full year. Analysts surveyed by Thomson Financial were expecting earnings of $650 million for the third quarter, about $2.3 billion for the full year.
But Mack told analysts that the cost of raw materials were “racing ahead well beyond what we anticipated,” and shortages of various parts and components ”are cropping up from time to time” despite suppliers’ best efforts.
For the first six months of the fiscal year, Deere said it earned $1.13 billion, or $2.56 per share, on $13.3 billion in sales. That compared with $862.3 million, or $1.88 per share, on $11.3 billion in sales a year earlier.
While crediting Deere with keeping its earnings guidance unchanged for the rest of the year, Collins said the company’s tendency to be “pretty darn conservative here for the last couple of years” helped it consistently top Wall Street’s estimates. He said, “I think investors now are wondering if it’s over.”
This farm news was published in the May 21, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
| 5/21/2008 |
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