Ethanol Maker Green Plains Plunges on Bigger-Than-Expected Loss

(Bloomberg) -- Green Plains Inc. shares plunged the most in more than four years as the ethanol producer again disappointed investors with lower-than-expected financial results. 

The company posted a loss of 38 cents a share for the second quarter, double the average analyst estimate compiled by Bloomberg. Revenue fell 28% from a year earlier amid lower prices for corn-based ethanol and dry distillers grains used in livestock feed. 

Green Plains shares dropped as much as 16% to $13.57, the lowest level since early 2021. The shares have lost 56% over the last 12 months after several quarters that fell far short of analyst expectations. 

“The miss in general is another hit to folks anxiously awaiting the company’s turnaround,” Bloomberg Intelligence analyst Brett Gibbs said. 

Prior poor performances prompted activist investor Ancora Holdings Group to call for a sale of the company, leading Green Plains to start a formal review earlier this year that could include a merger, sale or acquisition. The biofuel producer said on Tuesday Bank of America and Vinson & Elkins LLP are working as advisers in the process. 

Green Plains Chief Executive Officer Todd Becker has been attempting to transform the company from primarily a traditional ethanol producer into a cutting-edge agribusiness making high-value ingredients from corn for the food, industrial and advanced renewable fuel industries. One of his motivations is to free the company from the volatility of an ethanol market that’s dependent on government policies. 

Green Plains also is selling assets to pay down debt, agreeing to sell its unit train terminal in Birmingham, Alabama.

Becker said in a company statement that margins are improving and that the company expects to return to profitability in the third quarter. Still, analysts are forecasting a full-year loss of 68 cents a share, far worse than projections at the beginning of this year for earnings of more than $1.50 a share.

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