American Vanguard says purchasing patterns will hurt Q2 results

American Vanguard (AVD +1.7%) says recent purchasing patterns reflecting a "downshift" for corn-related products will hurt Q2 results, but shares nevertheless are pushing higher.

In AVD's downside guidance for Q2, it sees EPS near break-even vs. $0.10 analyst consensus estimate and revenues down 21% Y/Y to ~$68.6M vs. $80.6M consensus, citing lower than normal purchasing of corn inputs and lower factory utilization rates.

AVD says channel inventories have been reduced significantly this spring and that more normal purchasing patterns are likely to resume later this year and into next; says it is starting cost reduction programs to right-size manufacturing in-line with forecast product demand.

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