Imperial Sugar Company says year-over-year comparisons don’t tell whole story
During an afternoon conference call, Imperial Sugar Company (Nasdaq: IPSU) executives tried to put the company’s recently released third-quarter results into perspective.
“In our opinion, the third quarter continues a year of good performance in the face of declining industry dynamics. A clearly exceptional performance in last year’s second half due to post-Katrina activities is a factor making year-over-year comparisons very difficult,” CEO Robert Peiser said during the call. “Except for last year, this year’s third quarter results were the best of any third quarter since I joined the company over five years ago.”
Before the opening bell, the Sugar Land, Texas-based company announced earnings of $7.6 million, or $0.64 per share, during the three months ended June 30. During the same period of 2006, the company recorded earnings of $15.2 million, or $1.30 per share. Revenues totaled $216 million, compared with $231 million a year earlier. Wall Street analysts were expecting earnings of $0.38 per share on $201.7 million in revenue.
Peiser said year-over-year comparisons are difficult because last year the sugar industry was short on capacity and enjoyed “helpful” pricing dynamics. This year, he said the industry’s capacity has been restored and market prices for sugar across many channels are considerably weaker. However, he said the sugar that the company purchased cost less than last year’s prices. Lower energy prices also helped the company make a profit, he said.
Even with lower energy and sugar costs, Peiser said the company will have a difficult time comparing with last year’s results.
At noon, Imperial Sugar announced that its board approved a quarterly cash dividend of $0.07 per share payable on August 24 to shareholders of record on August 14. Also this afternoon, Imperial Sugar announced that Greig P. DeBow, Jr. has been appointed to be the company’s vice president of consumer sales and marketing.
“One of the disadvantages of this industry is its cyclicality. At the same time, one of its advantages is its cyclicality. I don’t think we should ever lose sight of this,” Peiser said. “Our financial results so far this year are well above historical averages. We’re prepared to face the marketplace challenges that are now in front of us with a considerable amount of financial strength and a stronger management team that’s committed to enhancing shareholder value.”
In today’s trading, shares of the small-cap company were up $0.04, or 0.15%, at $26.89. Over the last 52 weeks, shares have ranged between $21.75 and $35.21.
