Why did ALTO's Q3 earnings fall short of forecasts?

Alto Ingredients' Q3 earnings fell short of forecasts due to a combination of factors:

1. **Revenue Shortfall**: Alto Ingredients reported a revenue shortfall of $32.32 million, missing the consensus estimate of $268.62 million. This decline in revenue was attributed to lower average sales prices for alcohols and essential ingredients, resulting in a total revenue of $236.3 million.
2. **Earnings Per Share (EPS) Miss**: The company reported an EPS of -$0.57 for Q4 2024, which was a significant miss compared to the forecasted $0.06. This resulted in a negative surprise of $0.63.
3. **Net Sales Decline**: Alto Ingredients experienced a decrease in net sales, declining from $1.2 billion in the previous year to $965.3 million. This decline was due to lower average sales prices for alcohols and essential ingredients.
4. **Cost Increase**: The cost of goods sold was $955.5 million, representing 99% of net sales. This increase in cost ratio was due to lower commodity crush margins.
5. **Asset Impairments**: The company reported asset impairments totaling $24.8 million, primarily related to the cold-idling of the Magic Valley facility and changes to the Eagle Alcohol business.
6. **Strategic Initiatives**: Alto Ingredients is undergoing restructuring efforts, including cost-saving measures and strategic options. These initiatives include idling the Magic Valley plant and reducing headcount, which may have had an impact on operational efficiency and profitability.

In summary, Alto Ingredients' Q3 earnings fell short of forecasts due to a combination of revenue shortfall, earnings per share miss, net sales decline, cost increase, asset impairments, and strategic initiatives. These factors collectively contributed to the company's financial challenges in the quarter.