MGP Ingredients at 52-week low as Q4 profit misses expectations
Shares of MGP Ingredients, Inc. (Nasdaq: MGPI) have set a new 52-week low following news before the start of trading that the maker of natural grain-based ingredients and distillery products narrowed its fourth-quarter profit and missed Wall Street’s expectations.
The net income for the three months ended July 1 was $1.7 million, or $0.10 per share, while four analysts polled by Thomson Financial were calling for net income of $0.14 per share. During the same quarter of 2006, the Atchison, Kan.-based company reported a profit of $7.4 million, or $0.43 per share.
MGP Ingredients booked revenues of $101.5 million, 8.1% above analysts’ projected sales of $93.9 million and 12.4% more than the $90.3 million the company brought in a year earlier.
“Our distillery profitability continued to be impacted by rising corn prices,” said CEO and chairman Ladd Seaberg.
Corn is the principal raw material used in MGP Ingredients’ alcohol production process, and Seaberg said that the company’s bottom line has been hurt by a 75.9% year-over-year rise in the price of corn.
However, corn prices have recently eased from their 10-year highs and Seaberg said he expects to see some cost price relief in fiscal 2008.
“Our distillery operations continue to generate strong profits and cash flows due to the diverse nature of our alcohol products,” he said.
MGP Ingredients produces ethanol and beverage alcohol, primarily in the form of vodka and gin. The ingredients the company produces consist mainly of wheat proteins and starches.
For all of 2007, profit came in at a record $17.7 million, or $1.05 per share, on revenues of $368.0 million, also a record. That’s below the forecasted net income of $1.14 per share but above analysts’ projected sales of $359.31 million.
Profit in fiscal 2006 was $14.0 million, or $0.83 per share, on sales of sales of $322.5 million. MGP Ingredients attributed the improvement to an increase in sales of distillery products sales.
At 12:49 p.m. ET the stock was down $1.67, or 11%, to $14.20. The previous 52-week low of $15.44 was set on August 6. The 52-week high of $25.36 was reached on Sept. 6, 2006.
