Shares of seed company Ceres Inc. plunged 28 percent on Friday after analysts downgraded shares following a larger-than-expected loss in its fiscal third quarter and disappointing news about crop yields.
After the markets closed on Thursday, the Thousand Oaks agricultural biotech reported a net loss of $9.3 million (-38 cents a share) for the quarter ended May 31, compared with a net loss $8.4 million (-34 cents) in the same period a year earlier. The wider loss was attributed to higher cost of sales and increased administrative and other expenses.
Revenue rose 27 percent to $1.4 million, which was higher than Wall Street expected.
Analysts surveyed by Thomson Financial Network on average had expected a loss of 31 cents a share on revenue of $1.05 million. Analysts at Raymond James and Piper Jaffray on Friday downgraded Ceres’ shares to the equivalent of “neutral.”
The company develops seeds for crops that are used by energy companies to ferment into ethanol. The firm has partnered with 31 ethanol mills in Brazil for seed sales and crop management services for the current growing season. The company reported that ethanol yields of its sweet sorghum crops were 50 percent higher than last year, but were more variable that expected.
Chief Executive Richard Hamilton said Ceres is positioned for strong growth but weaker crop yields could slow sales in the short term.
“As a result, we expect total sweet sorghum seed sales next season to grow more modestly than originally anticipated,” Hamilton said in a statement.
Shares on Friday closed down 91 cents, or 28 percent, to $2.34 on the Nasdaq.
For reprint and licensing requests for this article, CLICK HERE.