S&W Seed Co (SANW); Adding acres for this year’s alfalfa crop . Increasing estimates for revenue and earnings.
Ian Gilson, CFA
The company has announced that it has added close to 360 acres to the 4,300 acres available for the cultivation of alfalfa at the end of the second quarter. This is compared to the 2,400 acres actually harvested in the fall of 2011. Of the current total 35% will be used by S&W for seed production, as opposed to buying seed from growers under contract. This will increase seed for sale at a higher gross margin. We had based our estimates on the 2,400 acres at a 30% gross margin for the six months sales period and have increased our revenue estimates from $14 million to $18 million with a 32.5% gross profit margin. This has increased our 2013 earnings per share estimates from $0.14 to $0.32.
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