Shares of Darling International Inc. (DAR) tumbled more than 12 percent in extended trade Thursday after the company reported earnings and revenue for the first quarter that missed analysts' estimates.
The rendering and bakery waste recycling solutions provider reported a 39 percent decline in profit, reflecting lower raw material volumes as well as finished product prices.
The decrease in sales for the quarter was mainly due to lower finished product selling prices for proteins and fats as well as lower raw material volumes. Export volumes dropped considerably compared to last year, adding further downward pressure to the finished product prices.
Randall Stuewe, Chairman and CEO of Darling International said, "First quarter results were solid but lower as compared to the record setting first quarter of fiscal 2011 due primarily to a substantial drop in finished product prices for fats and proteins."
Stuewe added, "The company built significant inventories in fats and proteins with export volumes all but coming to a standstill, and the bakery business processed lower volumes as commercial bakeries took abnormally longer winter shutdowns with markets remaining flat."
Darling International recycles beef, pork and poultry waste streams into useable ingredients such as tallow, feed-grade fats, meat and bone meal, poultry meal and hides. The company also recovers and converts used cooking oil and commercial bakery waste into valuable feed and fuel ingredients.
The Irving, Texas-based company's first-quarter net income was $28.57 million or $0.24 per share, down from $46.56 million or $0.43 per share in the year-ago period.
On average, seven analysts polled by Thomson Reuters expected the company to earn $0.30 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 12 percent to $387.11 million from $439.90 million in the prior-year quarter. Analysts had a consensus revenue estimate of $410.78 million.
DAR closed Thursday's trading at $16.00, up $0.04 or 0.25 percent on a volume of 647,900 shares. In after-hours, the stock declined $1.99 or 12.44 percent to $14.01.
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