Green Plains Stock Tumbles On Wider-Than-Expected Loss: Retail Shrugs Off Concerns
Synopsis
The company unveiled a corporate reorganization and cost-reduction initiative, planning savings of up to $50 million annually.
Green Plains (GPRE) stock dived about 20% on Friday and hit the lowest since 2020 after the company posted a wider-than-expected loss in the fourth quarter and missed revenue estimates.
The company reported a loss of $0.86 for the three months ended Dec. 31, compared with a net income of $0.12 per share in the year-ago quarter. Analysts were expecting a loss of $0.37 per share during the quarter.
Its quarterly revenue fell 18% to $584 million compared to the year-ago quarter. Wall Street was expecting revenue of $630 million.
The company attributed the decline to lower weighted average selling prices on ethanol, distillers grains, and renewable corn oil and lower ethanol and distillers grains selling volumes.
Green Plains’ ethanol production segment sold 209.5 million gallons of ethanol during the fourth quarter, compared with 215.7 million gallons last year.
Its consolidated ethanol crush margin was a negative $15.5 million, compared with $53 million in the year-ago quarter.
The company also unveiled a corporate reorganization and cost-reduction initiative, planning savings of up to $50 million annually.
The company also said it would idle its Fairmont, Minnesota facility due to sustained localized margin pressure from flooding in that region.
“With several idled plants across the industry, including Fairmont, we expect to see ethanol physical stocks improve as we move through the year, which could lead to a more constructive environment,” said CEO Todd Becker.
Its board is also continuing a strategic review, which includes a potential sale. The review was launched last year following calls from activist investor Ancora Capital.
Retail sentiment on Stocktwits rose to ‘bullish’ (59/100) territory, while retail chatter was ‘extremely high.’
Over the past year, Green Plains stock has fallen nearly 74%.
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