THE Andersons Inc. reported first-quarter net income attributable to the company of $22.7 million, or 80 cents per share, on revenues of $1 billion, which compares to net income of $12.6 million, or 45 cents per share, on revenues of $1.3 billion for the same period of 2013.
The Ethanol Group achieved record operating income of $19.8 million in the first quarter, compared to $2.5 million during the same period of 2013. The higher income is primarily due to improved performance of the ethanol limited liability company investments, which benefited from strong ethanol margins.
Ethanol margins during the first quarter were affected by low U.S. ethanol stocks, accompanied by improving domestic and export demand. The Ethanol Group also benefited from improved production rates, ongoing service fees and increased co-product sales of corn oil, E85 fuel and dried distillers grains. Total revenues for the quarter were $189 million compared to revenues of $199 million for the same period last year.
The Rail Group had record first-quarter operating income of $15 million on revenues of $52 million. In the same three-month period of 2013, the group earned $14.6 million, and revenues were $46 million. The group's revenue and income benefited from higher lease rates and increased income from car sales.
The group recognized $10.8 million in pretax gains on sales of railcars and related leases and non-recourse transactions in the first quarter, which is approximately $1 million more than the prior year. The average utilization rate for the quarter was 88.4%, compared to 84.6% for the same period last year.
The Grain Group reported first-quarter operating income of $11.3 million, compared to $8.3 million for the same period of the prior year. Included in this year's results was a pretax gain of $17.1 million from the partial sale of the Lansing Trade Group holdings. At the time of the sale, the group reduced its ownership percentage, on a fully diluted basis, to approximately 39.2%, whereas it previously held approximately a 47.5% ownership interest in Lansing.
The Grain Group had a loss from operations this quarter due, in part, to significantly lower space income, which was the result of less carry in the corn market and significantly reduced wheat inventory. Earnings from the group's equity investments were also significantly reduced.
First-quarter revenues for the Grain Group were $583 million for 2014 and $836 million for 2013. Revenues decreased primarily due to lower grain prices, which decreased almost 30%.
"The superior results seen last year in both our Ethanol and Rail groups have continued into the first quarter. The Ethanol Group worked diligently to increase its production in the first quarter when other ethanol plants were forced to reduce production. This effort allowed our ethanol team to fully capitalize on the strong margins in the market. Our Rail Group continued to perform well, working to increase both lease and utilization rates over time," chief executive officer Mike Anderson said.
"The Grain Group, however, had a difficult quarter. Anticipated returns on stored grain inventories simply did not materialize in the quarter. While the Plant Nutrient Group was impacted by adverse weather in the first quarter, it should benefit from an anticipated significant corn crop planting in the second quarter, as long as the weather cooperates," he added.