Mission Produce Inc (NASDAQ:AVO) stock rallies 20.86% (As on September 10, 11:28:51 AM UTC-4, Source: Google Finance) after the company reported fiscal third quarter earnings that handily beat analyst expectations. Mission Produce’s strong performance was driven by higher avocado pricing, which offset lower volumes. Average per-unit avocado sales prices increased 36% YoY, more than compensating for a 10% decrease in avocado volume sold. These price and volume dynamics resulted from lower avocado supply available during the quarter due to a combination of weather impacts on fruit development and production in Peru and fruit harvesting disruptions in Mexico. Despite overall volume reductions, domestic sales volumes were relatively flat during the quarter, demonstrating the resiliency of demand for avocados amid higher price points in the U.S. market. Adjusted net income of $16.7 million compared to $10.3 million, for the same period last year. Adjusted EBITDA increased 49% to $31.5 million, compared to $21.2 million in the same period last year. Cash flow from operations for the nine months ended July 31, 2024 was $55.4 million, compared to cash used of $(7.3) million in the prior year period.

Moreover, net sales in the Marketing & Distribution segment increased 25% to $321.3 million for the quarter. Total sales in the International Farming segment for the third quarter of fiscal 2024 were $27.4 million, compared to $38.2 million for the same period last year

AVO in the third quarter of FY 24 has reported the adjusted earnings per share of 23 cents, beating the analysts’ estimates for the adjusted earnings per share of 3 cents. The company had reported the adjusted revenue growth of 24 percent to $324 million in the third quarter of FY 24, beating the analysts’ estimates for revenue of $230.95 million. Gross profit increased $8.6 million in the third quarter of fiscal 2024, compared to the same period last year, to $37.0 million and gross profit percentage increased 50 basis points, to 11.4% of revenue. The increases were attributed to the Marketing and Distribution segment, where strong per-unit margins on avocados sold more than offset lower volumes. In the International Farming segment, gross profit was negatively impacted by a $3.2 million asset write-down for undeveloped land that was reassumed by the Peruvian government.

For Q4, Mission Produce expects industry volumes to be flat to slightly lower compared to last year. Pricing is anticipated to decrease sequentially but remain about 15% higher than the $1.39 per pound average in Q4 2023.