DEKALB GENETICS REPORTS LOWER EARNINGS IN FIRST QUARTER DUE TO ACCOUNTING CHANGE; ARGENTINA DRIVES SALES INCREASE
DEKALB, Ill., Jan. 13 /PRNewswire/ -- DEKALB Genetics Corporation (NASDAQ-NMS: SEEDB) reported lower earnings for the first fiscal quarter of 1993, due to a change in the method of matching international seed expenses with seasonal revenues. The change masks an excellent performance by the Argentine seed operation, which typically generates most first-quarter seed sales and earnings. For the three months ended Nov. 30, 1992, DEKALB earned $800,000, or 15 cents per share, compared with $2.6 million, or 51 cents per share, in the same period last year. Results would have been comparable without the accounting change, which was made in the second quarter of 1992. If first quarter 1992 earnings were restated, the company would have earned $900,000, or 17 cents per share. (Full year results were not affected by the revision.) Revenues for the fiscal 1993 period rose 6 percent to $47.2 million from $44.4 million last year, with higher Argentine corn volume driving the sales gain. Results from the company's largest business -- U.S. seed -- are almost entirely realized in the second and third fiscal quarters. Thus, the first quarter is not indicative of either U.S. seed results or the company's total results for the full year.
Pre-tax earnings for the seed business, which primarily include international operations in the Southern Hemisphere, fell to $3.5 million in the first quarter from $5.0 million the previous year. Excluding the accounting change, seed segment earnings were more than $1.0 million higher than the year-ago period. Revenues rose 12 percent to $31.1 million from $27.7 million. "Our Argentine operation is on track to produce another year of strong sales and earnings," said Bruce P. Bickner, chairman and chief executive officer. "Corn sales volume was 35 percent higher than in the previous year, as our market share increased to over 40 percent. As the leading marketer of hybrid seed corn, we are benefiting from both higher planted acreage and a product line that is delivering excellent results to Argentine farmers. "In the United States, it is too early to forecast results because shipments of hybrid seed corn to U.S. customers are just beginning," Bickner added. "Not surprisingly, last fall's very late harvest has delayed the order pace. We are encouraged, however, by strong early demand for our newer corn hybrids, which demonstrated exceptional performance last fall on customers' farms -- the ultimate test of product approval." U.S. farmers are expected to plant about 4 to 5 percent fewer acres of corn this spring, constrained by higher set-aside requirements from the U.S. Department of Agriculture resulting from the record harvest in 1992. However, unlike last year, DEKALB expects to have good supplies of new hybrids, which will further strengthen the available product mix. "Our seed corn production was also above target last fall," Bickner said. "The larger crop should produce lower unit corn costs for fiscal 1993."
Pre-tax earnings from the swine operation continue to be under pressure from low commercial hog prices. Earnings in the first quarter fell by more than 50 percent to $700,000 from $1.5 million the previous year. Revenues slipped 8 percent to $10.5 million from $11.4 million. "Commercial hog prices in the first quarter of 1993 were lower, on average, than the year-ago period, which has resulted in a softer breeding stock market," Bickner said. "Although breeding stock volume was up overall due to increased royalty units, a less favorable product mix reduced breeding stock revenue and profitability in the first quarter."
DEKALB Poultry continues to feel the effects of weak market conditions, with domestic breeder placements slowed by low egg prices. The poultry operation posted a $200,000 loss, compared with pre-tax earnings of $300,000 in the previous year. Revenues rose slightly to $5.6 million from $5.3 million. "The sluggish domestic industry, together with low by-product prices, is affecting DEKALB Poultry's profitability," Bickner said. "However, breeder exports are continuing on a growth track, and the outlook is promising in our international markets." Based in DeKalb, 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 11/30/92 11/30/91 11/30/91 Reported Proforma Operating Revenues $47.2 $44.4 $44.4 Earnings Before Income Taxes 1.2 4.0 1.4 Net Earnings 0.8 2.6 0.9 Net Earnings Per Share $.15 $.51 $.17 Dividends Declared Per Share .20 .20 .20 -0- 1/13/93 /CONTACT: Thomas R. Rauman, DEKALB Genetics CFO, 815-758-9223/ (SEEDB)
CO: DEKALB Genetics Corporation ST: Illinois IN: SU: ERN
KH -- MN002 -- 4339 01/13/93 08:31 EST
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|Date:||Jan 13, 1993|
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