Failing to deliver on both the top and bottom lines, synthetic-biology specialist Amyris (AMRS -9.20%) reported disappointing third-quarter 2021 earnings results yesterday after the market closed. Whereas analysts were expecting the company to report revenue of $80.6 million and breakeven on an earnings-per-share (EPS) basis, the company reported sales and EPS of $47.9 million and negative $0.27, respectively.
In addition, investors are selling shares after learning that the company is raising capital through the issuance of senior convertible notes.
As of 1:38 p.m. EST, shares of Amyris are down 30.2%
Although the company reported a year-over-year sales increase of 39.7%, it didn't seem to be enough to satisfy investors' appetites. Like Wall Street analysts, investors were expecting the company to report more on the top line. Moreover, they may fear that sales in the fourth quarter (and maybe beyond) will also come in lower than expected as the company faces supply chain challenges.
On the Q3 2021 conference call, for example, John Melo, Amyris's CEO, acknowledged that the company "experienced delays at the Port of Savannah, Georgia related to a cargo that was scheduled to be unloaded in August." The delay resulted in the company incurring about $3.5 million in costs and negatively impacted Amyris's gross margin.
Another worry for investors is the fact that the company is offering $400 million in senior convertible notes due in 2026. The prospect that investors will suffer dilution in the coming years is certainly leading some to hit the sell button today.
While the company faced supply chain troubles in the third quarter, it's taking steps to rectify the situation. Amyris is developing ingredient-production facilities in Brazil and Reno that are expected to begin operations in 2022. In the Q3 financial results conference call, Amyris CEO John Melo said, "These facilities will not only provide us much more resilience on the supply chain, they will also reduce our operating costs significantly and improve our gross margin by about 1,000 basis points."
Investors may not be happy with the company's earnings report, but those who are patient and willing to sit tight while Amyris works through supply chain headwinds are now presented with a great opportunity to pick up shares on sale.