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Alto Ingredients Inc (ALTO) Q1 2024 Earnings: Misses Analyst Revenue and EPS Forecasts

GuruFocus Research
·3-min read

  • Net Loss: Reported a net loss of $11.725 million for Q1 2024, an improvement from a net loss of $13.166 million in Q1 2023, but fell short of the estimated net loss of $10.93 million.

  • Revenue: Achieved revenue of $240.629 million, above the estimated revenue of $217.28 million and down from $313.891 million year-over-year.

  • Earnings Per Share (EPS): Recorded a loss per share of $0.17, compared to a loss of $0.18 in the previous year, but fell short of the estimated EPS of -$0.15.

  • Gross Profit: Gross loss improved by $0.8 million year-over-year, reducing the gross loss to $2.4 million from $3.164 million in the previous year.

  • Adjusted EBITDA: Improved by $3.4 million, totaling a loss of $7.053 million compared to a loss of $10.419 million in Q1 2023.

  • Cash Position: Ended the quarter with $29.3 million in cash and cash equivalents, slightly down from $30.0 million at the end of the previous quarter.

  • Operational Efficiency: Completed biennial outage at the Pekin wet mill, expected to enhance production rates and reliability for upcoming quarters.

On May 6, 2024, Alto Ingredients Inc (NASDAQ:ALTO), a leading producer of specialty alcohols and essential ingredients, disclosed its financial outcomes for the first quarter ended March 31, 2024, through its 8-K filing. The company reported a net loss of $11.725 million, which is an improvement from the previous year's $13.166 million loss but still falls short of analyst expectations. The reported earnings per share (EPS) of -$0.17 also missed the estimated -$0.15. Despite these challenges, the company saw an increase in Adjusted EBITDA and a reduction in gross loss compared to Q1 2023.

Company Overview

Alto Ingredients Inc operates primarily in the production and distribution of renewable fuels and essential ingredients across multiple markets including Health, Home & Beauty, and Food & Beverage. The company's operations are segmented into Marketing and Distribution, Pekin Campus Production, and Other Production, with significant revenue deriving from the Pekin Campus segment.

Financial Performance Insights

For Q1 2024, Alto Ingredients reported net sales of $240.629 million, a significant decline from $313.891 million in the same period last year, which also missed the analyst's revenue estimate of $217.28 million. The gross loss was reduced to $2.4 million from $3.164 million in Q1 2023. The company's cash and cash equivalents slightly decreased to $29.3 million from $30 million at the end of December 2023.

Operational Challenges and Strategic Initiatives

President and CEO Bryon McGregor highlighted the adverse impact of weather conditions on the companys operations, including increased transportation costs and reduced production rates. Despite these setbacks, McGregor remains optimistic about the company's strategic initiatives like the carbon capture and storage (CCS) project, which aims to significantly reduce the carbon footprint and enhance sustainability.

Market and Future Outlook

The company anticipates a favorable market outlook for the remainder of 2024, bolstered by solid corn inventories and improved export demand for ethanol. The completion of the biennial outage at the Pekin wet mill is expected to enhance production rates and reliability heading into the summer driving season.

Financial Statements Detail

The detailed financial statements reveal a comprehensive view of the company's operations. The balance sheet shows a total asset value of $434.635 million as of March 31, 2024. The income statement reflects the operational challenges with a net loss of $11.725 million for the quarter. Adjusted EBITDA improved, however, reflecting some operational efficiencies gained during the period.

ADVERTISEMENT

In conclusion, while Alto Ingredients Inc faced significant challenges in the first quarter of 2024, strategic initiatives and operational improvements have begun to yield benefits. The company's focus on diversification and efficiency improvements, along with favorable market conditions, provide a positive outlook for future performance.

For more detailed information and to follow updates on Alto Ingredients Inc, visit GuruFocus.com.

Explore the complete 8-K earnings release (here) from Alto Ingredients Inc for further details.

This article first appeared on GuruFocus.