How Limoneira Earnings Could Grow Higher

Limoneira will release its quarterly report on Monday, and given the demand for healthier foods, the citrus grower has a big growth opportunity ahead of it. But looking at expectations for Limoneira earnings, growth might not be in the cards for the company -- at least in this quarterly report.

Limoneira concentrates on producing lemons, oranges, avocados, and specialty citrus fruits. But it also markets certain other specialty crops, including cherries, olives, and pistachios. Adding to its diversification, Limoneira has real-estate development and rental operations, as well, maintaining residential and commercial rentals as well as land leases. Let's take an early look at what's been happening with Limoneira over the past quarter, and what we're likely to see in its report.

Stats on Limoneira

Source: Yahoo! Finance.

Can Limoneira earnings shoot higher?
Analysts have had mixed views on Limoneira earnings in recent months. They've cut their July quarter views by $0.01 per share, but boosted their full-year projections by $0.06 per share. The stock has done quite well, however, with a 14% gain since early June.

Limoneira came into the quarter on a positive note, having reported a big jump in net income in its April quarter. Even though results were boosted by a one-time sale coming from its sale of stock in peer Calavo Growers, with which Limoneira has an equity-sharing arrangement, Limoneira's operating income doubled from year-ago levels, with revenue in its core agribusiness segment jumping 47%. Lemon sales rose substantially, but the big growth was in avocados and oranges, where revenue quadrupled and tripled respectively.

Limoneira has been looking for further growth opportunities. In July, the company announced an agreement with Cadiz to develop new lemon orchards on property that Cadiz owns in California's San Bernardino County.

But Limoneira isn't entirely focused on agriculture. In its quarterly report, CEO Harold Edwards noted his excitement about its Santa Paula East Gateway real-estate development project, which now has the needed approvals to allow for groundbreaking next year. Real-estate plays in the California market always have at least the potential for explosive performance, but much depends on how the economic environment shapes up in future years.

One key question Limoneira and its peers face is whether investors are properly valuing its business. Fruit giant Dole Food announced last month that its CEO plans to take the company private in a deal that would pay shareholders $13.50 per share. The stock currently trades above that level, suggesting that investors want more for their shares. Yet, both Dole and banana rival Chiquita Brands have faced extreme volatility in their stock prices in recent years despite the rise in demand for fresh fruits and vegetables as part of a broader healthy-food trend, making Limoneira look much more stable and profitable by comparison.

In the Limoneira earnings report, watch to see whether avocado and orange sales growth continues to drive overall results. With Calavo having reported record operating results earlier this week, Limoneira could be poised for further gains, as well.

No matter how large or how small your favorite stocks are, your best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report ,"3 Stocks That Will Help You Retire Rich," names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Click here to add Limoneira to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

The article How Limoneira Earnings Could Grow Higher originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.