MGP Ingredients (MGPI) Misses Q2 EPS by 3c, Beats on Revenues

MGP Ingredients (NASDAQ: MGPI) reported Q2 EPS of $0.37, $0.03 worse than the analyst estimate of $0.40. Revenue for the quarter came in at $85.8 million versus the consensus estimate of $84.39 million.

2017 and Long Term Guidance

MGP is offering the following guidance for fiscal 2017 and beyond.

• Reconfirming previous guidance, operating income is expected to grow between 10% and 15% annually from 2016 through 2018. This guidance excludes the anticipated gain from the sale of equity interest in ICP and the gain from a favorable litigation settlement and asset sale gain recorded in the third quarter of 2016.
• Recognizing the difficulty of projecting three years in the future, our conservative estimate of growth in operating income in 2019 is 15% to 20% as sales of aged whiskey inventory becomes a more significant factor.
• Moderate growth is expected in net sales in 2017, subject to some volatility as the company continues to shift sales from industrial to premium beverage alcohol.
• 2017 gross margins are expected to continue to grow versus 2016.
• 2017 effective tax rate is forecast to be 30%, and shares outstanding are expected to be approximately 16.8 million at year end.

2017 results compared to 2016

• Second quarter consolidated net sales increased 6.7% to $85.8 million as net sales growth of premium beverage alcohol and specialty ingredients more than offset declines in net sales of industrial alcohol.
• Second quarter consolidated gross profit increased 21.2% to $18.8 million, reflecting stronger gross profit results in both the Distillery Products and Ingredient Solutions segments.
• Consolidated gross margin increased 270 basis points to 22.0% for the second quarter, reflecting a 210 basis point improvement in Distillery Products and a 540 basis point margin expansion in Ingredient Solutions.
• Second quarter operating income increased 15.2% to $10.5 million.
• Equity in joint venture earnings decreased from $1.1 million to a loss of $0.8 million in the second quarter.
• Net income increased 1.0% to $6.4 million for the second quarter.
• Second quarter earnings per share, calculated on the two-tier method, remained consistent at $0.37 per share.

For earnings history and earnings-related data on MGP Ingredients (MGPI) click here.

You May Also Be Interested In

• Visa (V) stock rises as Q2 earnings, revenue come ahead of estimates
• Visa (V) Tops Q2 EPS by 7c, offers guidance
• Stride Inc. (LRN) Tops Q3 EPS by 17c, provides guidance