Farmer Bros. Reports Net Loss

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Farmer Bros. Co. reported a net loss of more than $4 million (30 cents per share) for its second fiscal quarter ended Dec. 31, compared with net income of $2.6 million (15 cents) in the year-earlier period.


The results mark the 13th straight quarter of year-over-year earnings declines.


The Torrance-based coffee roaster said the second quarter losses reflect increases in world green coffee prices, which resulted in a decrease in the value of green coffee futures and options used by the company to hedge against a decline in commodity prices.


The net realized and unrealized coffee trading losses in the second quarter amounted to $8.8 million, resulting in a net loss of $8.3 million, excluding dividend and interest income.


The company’s second quarter revenues were $51.2 million, compared with $51.5 million in the second quarter of last year.


“We believe the losses from our second-quarter hedging activities are likely to be recovered in part as we sell our roast coffee in future periods at higher prices,” said Interim Chief Executive Guenter Berger, in a statement.


Berger was appointed last month after the suicide of chairman and chief executive Roy E. Farmer. Despite the loss of Farmer, Berger said operations remain stable and Farmer Bros. is attempting to improve the business and create shareholder value through efforts to improve the effectiveness of its sales staff and strengthen its infrastructure with new information systems.

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