VeraSun Energy Corp., the second-largest U.S. ethanol producer, reported a third-quarter loss of $476 million on higher corn costs and bad hedging bets.
The net loss, equal to $3.03 a share, compares with net income of $7.8 million, or 9 cents a share, a year earlier, Sioux Falls, S.D.-based VeraSun said Wednesday in a regulatory filing. Analysts expected the company to lose 46.7 cents a share, according to the median of three estimates compiled by Bloomberg. Sales climbed to $1.08 billion from $221.9 million.
VeraSun filed for bankruptcy protection on Oct. 31, blaming swings in the prices of corn, the main ingredient for ethanol produced in the United States. The company said in court papers that it owed more than 1,700 creditors about $1.5 billion.
"It's almost a moot point," said Ron Oster, an analyst at AmTech Research, a division of Broadpoint Capital Securities Inc. in Albany, N.Y. "You're really just looking at how big the loss is."
Ethanol futures on the Chicago Board of Trade averaged $2.34 a gallon during the quarter, up 31 percent from a year earlier. Corn averaged about $5.78, 72 percent higher than a year ago.
On Nov. 3, Goldman Sachs abandoned coverage of the industry after VeraSun filed for bankruptcy.
"The tight margin environment is expected to persist and balance sheets are stretched," Oster said.
On Nov. 4, VeraSun said it stopped construction of a 110 million-gallon-a-year plant in Janesville, Minn., as a result of the bankruptcy.
