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Shares of Mission Produce Inc. jumped after hours on Thursday after the avocado grower reported fiscal second-quarter results that beat estimates, after lower avocado prices led to more product sold but a drop in dollar-figure sales.
The company reported a net loss of $4.6 million, or 7 cents a share, contrasting with a profit of $2.4 million, or 3 cents a share, in the same quarter last year. Sales fell 20% to $221.1 million, driven lower by falling avocado prices and “robust” Mexican harvest volumes. Mexico is the world’s largest avocado producer.
Adjusted earnings per share came in at 1 cent, compared with 4 cents a year ago.
Analysts polled by FactSet expected an adjusted per-share loss of 1 cent, on revenue of $218.1 million.
Still, sales volumes rose 19%, amid a “more normal pricing environment,” after prices surged last year. Those prices jumped on stronger demand, labor and supply-chain constraints, and a brief suspension of Mexican avocado imports.
“Despite the impact of lower prices on per unit margins in the short term, a more rational pricing environment is advantageous for long-term consumption growth and allows Mission to leverage our global distribution footprint to penetrate new growth markets,” Chief Executive Steve Barnard said in a statement.
Mission Produce shares
AVO,
rose 6.2% after hours on Thursday. Executives said the company began operations at a new distribution center in the U.K.
Management said they expected volumes to be roughly 20% higher in the company’s third quarter, “primarily due to the combination of California’s harvest shifting to the third quarter versus the second quarter last year, a strong Peruvian harvest outlook and a larger off-bloom Mexican harvest.”
Shares of Mission Produce are down 10% over the past 12 months. By comparison, the S&P 500 Index
SPX,
has risen 4.3% over that period.
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