Limoneira (LMNR) Misses Q1 EPS by 4c, Revenues Miss; Offers FY19 EPS Mid-Point Guidance Above Consensus
Limoneira (NASDAQ: LMNR) reported Q1 EPS of ($0.11), $0.04 worse than the analyst estimate of ($0.07). Revenue for the quarter came in at $42 million versus the consensus estimate of $46.73 million.
Harold Edwards, President and Chief Executive Officer, stated, "Our topline growth was primarily due to a 39% increase in lemon sales, partially offset by weaker lemon pricing due to colder weather in the U.S. during the last month of the quarter and lower orange pricing in the quarter. Our business is best viewed on an annual basis, which is why despite the lower pricing environment, we believe the underlying fundamentals of the business are strong and remain confident we will achieve our full year 2019 guidance. As we continue to expand and solidify our place as a global supplier of fresh citrus, through organic growth and acquisitions such as our recent joint venture and land acquisition in Argentina, we will continue to reduce the seasonal nature of our business. In addition, our real estate development project, Harvest at Limoneira, has now closed on 174 lot sales and we expect this project will generate meaningful equity earnings on our statement of operations during the second quarter of this year.”
Alex Teague, Senior Vice President, stated, "We are very excited to start off the first half of this year with a strategic move into Argentina, as we continue to look for ways to access new markets and networks to increase our production and distribution as part of our One World of CitrusTM initiative. This expansion of our global footprint into Argentina strengthens our ability to become a 365-day, 24/7 global supplier of fresh citrus to our valued customers around the world. In addition, we are pleased with the successful integration of our two acquisitions last year and are seeing great grower retention from the Oxnard Lemon acquisition and increased production capabilities.”
Limoneira sees FY2019 EPS of $0.75-$0.85, versus the consensus of $0.79.
- Due to recent acquisitions and expansion of its global lemon supply, The Company is providing additional detail on its expected annual lemon sales. For fiscal year 2019, the Company and its international affiliates expects to sell 8.4 to 9.0 million cartons of fresh lemons globally. Due to the competitive nature of international business the Company is not providing average price projections for international lemon sales. Included in the global cartons estimate, is the Company’s domestic cartons which it expects to sell between 5.2 and 5.5 million cartons of fresh lemons compared to previous guidance of 5.0 and 5.3 million cartons of fresh lemons at an average price of approximately $26.00 compared to previous guidance of $27.00.
- The Company expects to sell approximately 1.7 to 2.0 million pounds of avocados at approximately $1.20 per pound.
- Due to excessive heat in the summer of 2018, the Company expects minimal revenue from avocados in fiscal year 2019. Offsetting this temporary event will be the benefit of crop insurance for approximately $2.5 million calculated on actual avocado harvest in fiscal year 2019.
- The Company expects operating income for fiscal year 2019 to be approximately $20.0 million to $23.0 million compared to operating income of $9.5 million for fiscal year 2018.
- Fiscal year 2019 Adjusted EBITDA is expected to be in the range of $28.0 million to $32.0 million.
- The Company expects fiscal year 2019 adjusted earnings per diluted share to be in the range of $0.75 to $0.85 with an estimated 18.4 million diluted shares outstanding. Adjusted EPS guidance for fiscal year 2019 excludes the potential impact of mark to market changes in the value of its 250,000 shares of Calavo. Beginning in fiscal year 2019, the Company is required to measure the changes in fair value of this investment on its statement of operations. In addition, adjusted earnings per share does not include expected equity earnings from its real estate development, Harvest at Limoneira.
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