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DEKALB GENETICS REPORTS IMPROVED U.S. CORN RESULTS, BUT LOWER TOTAL EARNINGS

 DEKALB, Ill., April 15 /PRNewswire/ -- DEKALB Genetics Corporation reported higher earnings from its U.S. seed corn operations for the first six months of fiscal 1993, but reduced earnings from its swine and poultry businesses produced lower consolidated results. For the six months ended Feb. 28, 1993, DEKALB Genetics earned $7.9 million, or $1.46 per fully diluted share, compared with $8.2 million, or $1.50 per fully diluted share, for the same period last year. Revenues of $176.4 million were down slightly from $178.8 million recorded the previous year.
 For the second quarter, DEKALB reported earnings of $7.1 million, or $1.23 perfully diluted share, compared with $5.6 million, or 98 cents per fully diluted share, in the prior-year period. Second-quarter fiscal 1992 earnings would have been comparable if they were restated for an accounting change regarding seasonalization which was made in that quarter of last year. The change had no impact on the six-month comparison. Revenues for the quarter were $129.2 million, down about 4 percent from last year.
 Sales from the company's largest business -- U.S. seed -- are recognized in the second and third fiscal quarters. Consequently, the two quarters taken together are the best indicator of full year U.S. seed results.
 Seed Operations
 Seed pre-tax earnings for the first six months rose nearly 13 percent to $17.6 million from $15.6 million in the same period last year. Revenues of $145.0 million were about flat with $146.8 million last year. The earnings gain was due to higher U.S. corn unit margins which have improved over last year because of higher average selling prices and lower unit costs. "Last year's harvest led to above-target U.S. seed corn production, which had the effect of lowering our unit corn costs," said Bruce P. Bickner, chairman and chief executive officer.
 For the quarter, the seed operation reported pre-tax earnings of $14.1 million, up slightly from the second quarter of fiscal 1992, after adjusting for the accounting change regarding seasonalization. Revenues were down 4 percent to $113.9 million from $119.1 million last year. "U.S. corn shipments are running slightly behind last year's pace, but we attribute that to the late harvest last fall," Bickner said. "U.S. farmers are expected to plant fewer acres of corn this spring; however, we expect to gain U.S. corn market share."
 International seed results were slightly below last year. The Argentine seed operation is finishing the season with excellent results, with corn volume exceeding the previous year by 35 percent. However, changes in European agricultural policies are putting pressure on both acreage and seed margins in that part of the world. In addition, the strengthening of the dollar against several major European currencies has restrained profitability from European seed operations.
 Swine Operations
 Year to date, DEKALB Swine's revenues of $21.3 million were comparable with $21.8 million recorded last year. Earnings, however, were only $1.3 million, sharply lower than the $2.2 million reported in the first six months of 1992. For the second quarter, the swine business registered pre-tax earnings of $600,000, down from $700,000 in the previous year. Revenues rose slightly to $10.8 million from $10.4 million.
 Smaller producers' demand for DEKALB breeding stock has declined in 1993. As a result, royalties from DEKALB's licensing programs with the bigger hog producers make up a larger part of DEKALB's sales mix in the current year. These royalties protect DEKALB from the downside of the hog market cycle, but they generate lower margins than direct sales of breeding stock.
 Poultry Operations
 The poultry operation recorded an operating loss of $400,000 for the six months, compared with pre-tax income of $200,000 in the same period last year. Although international profitability doubled over the previous year, domestic breeder and chick volume continued to be depressed by low egg prices and a shrinking industry customer base. Year-to-date revenues of $10.1 million were nearly equal to $10.2 million last year.
 For the quarter, DEKALB Poultry posted an operating loss of $200,000, slightly greater than the $100,000 operating loss recorded the previous year. Revenues for the quarter were $4.5 million compared with $4.9 million in the second quarter of fiscal 1992.
 "Placements of breeders and chicks are typically higher in the second half of the fiscal year because of production cycles in both the international and domestic markets," Bickner said. "As a result, we expect stronger results from DEKALB Poultry in the second half of the year."
 Outlook
 DEKALB had indicated last fall that fiscal 1993 earnings would be in the range of $2.35 to $2.65 per fully diluted share, compared with $1.94 per fully diluted share in 1992. "It now appears this year's earnings will be below this range, although still higher than last year," said Bickner. "When compared with the prior year, we continue to expect substantially improved U.S. seed earnings. Results from our swine operation, though, are now expected to be significantly lower."
 Based in DeKalb, Illinois, DEKALB Genetics Corporation is engaged in the research, production and marketing of agricultural seed, hybrid swine and egg-laying breeding stock. DEKALB Genetics Corporation Class B Common Stock is traded on the NASDAQ National Market System, under the symbol SEEDB.
 DEKALB GENETICS CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In Millions, Except Per Share Amounts)
 Three Months Ended Six Months Ended
 2/29/92
 2/28/93 Reported Proforma(a) 2/28/93 2/29/92
 Operating Revenues $129.2 $134.4 $134.4 $176.4 $178.8
 Earnings Before
 Income Taxes 11.0 8.5 11.1 12.2 12.5
 Net Earnings $7.1 $5.6 $7.3 $7.9 $8.2
 Net Earnings Per Share:
 Primary $1.38 $1.08 $1.40 $1.53 $1.59
 Fully Diluted $1.23 $ .98 $1.23 $1.46 $1.50
 Dividends Declared
 Per Share $.20 $.20 $.20 $.40 $.40
 (a) Represents comparable seasonalization methodology as used in the current year.
 -0- 4/15/93
 /CONTACT: Thomas R. Rauman, DEKALB Genetics chief financial officer, 815-758-9223/


CO: DEKALB Genetics Corporation ST: Illinois IN: SU: ERN

KH -- MN002 -- 6021 04/15/93 08:31 EDT
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Date:Apr 15, 1993
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