Aventine Renewable Braces For Earnings (AVR)

Aventine Renewable Energy Holdings, Inc (NYSE: AVR) is set to report earnings after today’s close.  First Call has estimates pegged at $0.13 EPS on $611.6 million in revenues.  If it offers guidance, estimates are $0.04 EPS on $718.4 million in revenues for next quarter and $0.38 EPS on $2.58 Billion in revenues for all of 2008.  One interesting note is that despite all of the problems that (potentially) face ethanol analysts are looking for growth in 2009 to $0.47 EPS on $3.83 Billion in revenues.

Analysts have an average target around $6.00 and about the only goodthing you can say for its chart is that if we pretend to not hate USethanol companies and merely look at the chart as it was an ETF is thatit broke its death spiral.  But where it trades on technicals isanyone’s guess.  If you care about moving averages here, its 200-daymoving average is $7.34 and its 50-day moving average is $5.27.  Inorder to be fair and balanced despite our opinion of what the US shoulddo with this industry, it is impossible not to notice that if you wereevaluating it on analyst earnings estimates alone that its earningsestimates have risen for all forawrd and current quarters over the last90 days.

The company has already disclosed that in Q2 it would record a $8.5million charge over the sale of its Auction Rate Securities on top ofthe $21.6 million charge in Q1.  As of mid-June the company said it wasin talks to increase the amount of liquidity available to it under arevolving asset based loan facility.

This need for increased liquidity makes the argument that it tradesunder book value with a $275 million market cap nearly irrelevantbecause all the liquidity is being used to fund the building of newplants over the next year.

Shares are down over 3% today at $6.56 and the 52-week trading range is$3.66 to $17.23.  In 2006 this was briefly north of $30.00.

Jon C. Ogg
July 31, 2008