"We are pleased to be able to report record first quarter earnings," Chief Executive Officer Mike Anderson said. "The investments made in our agricultural businesses over the last several years, including our investment in Lansing Trade Group, are paying off nicely in this very positive agricultural environment. It is also worth noting that the quarterly operating results for each of our non- agricultural businesses improved over the prior year result as well."
Although the Grain Division led the company in first quarter income, the Plant Nutrient Group enjoyed the largest year-to-year increase in income. Continued good carry in the grain markets, particularly wheat, coupled with improved farm income opportunity created favorable fundamentals for the company's traditional agricultural businesses in the first quarter. Increased demand for U.S. grain exports and other agricultural products to feed an ever-growing world population along with the U.S. corn-based ethanol demand continues to create positive agriculture fundamentals.
The Grain & Ethanol Group reported first quarter operating income of $18.7 million, which was just $2 million lower than its year earlier record result of $20.7 million. These results were led by the Grain Division. The division reported record operating income of $15.1 million in the first quarter of 2011, and $12.2 million for the same period of the prior year. The division benefited from continued strong space income and record first quarter earnings from the investment in Lansing Trade Group. Revenues for the Grain Division were $638 million and $402 million for the first quarter of 2011 and 2010, respectively. Revenues increased significantly due to the overall climb in grain prices.
The Ethanol Division earned an operating income of $3.6 million in the first quarter. This compares to $8.5 million earned during the same period of the prior year. The decreased income is the result of a decline in the company's earnings from the ethanol LLC's, which have been negatively impacted by lower ethanol margins. Total revenues for the quarter were $133 million. In comparison, the division's revenues for the same period last year were $119 million.
The Plant Nutrient Group achieved operating income of $5.1 million during the first quarter. In the same three month period of 2010, the group reported $700,000 of operating income. This improved performance was due entirely to an increase in margin. Volume was virtually unchanged from the prior year. The margin improvement is primarily the result of the lagging effect of price escalation in the second half of 2010. Revenues for the first quarter of 2011 and 2010 were $124 million and $103 million, respectively. Revenues grew due to an increase in the average selling price per ton.
The Rail Group had an operating income of $3.5 million in the first quarter on revenues of $29 million. In the same three month period of 2010, the group earned $1 million and revenues were $27 million. This quarter, the group recognized $4.8 million in gains on sales of railcars and related leases, whereas last year $2.6 million was recorded. Gross profit from the leasing business was lower due primarily to lower average lease rates, decreased end of lease income, and increased maintenance expense incurred when preparing cars to return to service. The average utilization rate for the quarter was 82% in comparison to 70% for the same period last year.
The Turf & Specialty Group earned operating income of $3.3 million on $47 million of revenues during the first quarter. Last year, the group reported $2.7 million of income on $42 million of revenues for the period. Turf products tonnage was up from the prior year, however, margin per ton decreased slightly due to changing product mix.
The Retail Group had an operating loss of $2.7 million during the first quarter on revenues of $31 million. During the same period of the prior year the group had a loss of $2.8 million, and total revenues were $30 million.
In the prior year, the company recorded a one time adjustment to increase income tax expense by $1.5 million, as a result of the Patient Protection and Affordable Care Act, signed into law during the first quarter of 2010. This adjustment had an earnings per share impact of 9¢ on the 2010 first quarter results.
