The Santa Paula, California Company swung to a loss, dropping to a $0.21 per share loss from earnings of $0.35 in the prior year quarter. That’s well wider than the consensus estimate of a $0.01 per share loss.
Shares tumbled to $16.70 before the bell Tuesday but rebounded as the day went on, adding 5.1% $20.13.
Revenue came in at $42 million, down $1.1 million year over year and short of the $45.4 million called for by analysts.
According to CEO Harold Edwards, a greater supply of lemons due to increased rain has driven down prices.
"We believe we will continue facing pricing headwinds from the overabundance of larger fresh lemons due to previous heavy rains, until the end of July 2019,” Edwards said. “This unusual larger sized fruit curve currently being harvested is now expected to cycle through over the next 5 to 7 weeks with a normal size curve returning by end of July, which is longer than we previously expected.
Edwards expects record domestic and international lemon sales in fiscal 2019. Adjusted earnings are expected to be between $0.25 and $0.45, less than the Street expectations of $0.57 per share.
On Tuesday, Roth analyst Greg Sweeney reiterated a Buy rating and a price target of $25 for the Company. That represents a 30% premium over its Monday close.
Sweeney acknowledged the impact of weather on pricing, but is optimistic the company can rebound in 2020.
"While 2019 will clearly be a disappointment, increased acreage for lemons and bounce back in avocados and oranges should lead to significantly better results in 2020," Sweeney wrote.
Limoneira is an agribusiness with operations in California, Arizona, Chile and Argentina. The company produces lemons, avocados, oranges, among other crops.
–Updated to include the Roth note–
Contact Andrew Kessel at [email protected]
Follow him on Twitter @andrew_kessel