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Why Is Middleby (MIDD) Up 1.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Middleby (MIDD - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Middleby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Middleby Acquires Escher Mixers, Adds to Bakery Brands
Middleby reported third-quarter 2022 adjusted earnings (excluding 26 cents from non-recurring items) of $2.18 per share, which missed the Zacks Consensus Estimate of $2.36. The bottom line increased 13.5% year over year on higher sales.
Net sales of $992.9 million missed the Zacks Consensus Estimate of $1,021.3 million. The top line jumped 21.5% year over year. Organic revenues in the reported quarter increased 14.2% year over year due to improved market conditions and strong consumer demand. Acquired assets boosted sales by 10.9%, while movements in foreign currencies had a negative impact of 3.6%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group (representing 62.8% of the net sales) were $623.66 million, up 21.9% year over year. Organic sales in the reported quarter increased 17%. Buyouts boosted sales by 7.4%, while movements in foreign currencies had a headwind of 2.5%.
Sales from the Residential Kitchen Equipment Group (representing 22.3% of the reported quarter’s net sales) totaled $220.97 million, up 14.3% year over year. Organic sales in the quarter under review increased 2.3%. Buyouts had a positive impact of 17.7%, whereas movements in foreign currencies had a negative impact of 5.7%.
Sales from the Food Processing Equipment Group (representing 14.9% of the reported net sales) summed $148.24 million, up 31.6% year over year. Organic sales in the quarter jumped 21.7%, while movements in foreign currencies had a negative impact of 4.8%.
Margin Profile
In the third quarter, Middleby’s cost of sales increased 21.2% year over year to $627.64 million. Gross profit expanded 21.9% to $365.23 million. Gross margin increased to 36.8% from 36.6% in the year-ago quarter.
Selling, general and administrative expenses increased 14.7% year over year to $201.20 million. Operating income in the third quarter dropped 30.7% year over year to $161.71 million. Operating margin decreased to 16.3% from 28.6% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the third quarter, Middleby had cash and cash equivalents of $144.92 million compared with $180.36 million at the end of December 2021. Long-term debt was $2.69 billion at the end of the third quarter compared with $2.39 billion at the end of 2021.
In the first nine months of 2022, MIDD generated net cash of $173.45 million from operating activities compared with $346.04 million at the end of the year-ago period. Capital expenditure (net of sale proceeds) totaled $50.91 million compared with $23.67 million at the end of the first nine months of 2022. Free cash flow was $122.54 million in the first nine months of 2022, down 62% from the year-ago period.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.46% due to these changes.
VGM Scores
Currently, Middleby has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Middleby has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Middleby is part of the Zacks Manufacturing - General Industrial industry. Over the past month, Barnes Group (B - Free Report) , a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended September 2022 more than a month ago.
Barnes Group reported revenues of $314.74 million in the last reported quarter, representing a year-over-year change of -3.2%. EPS of $0.49 for the same period compares with $0.55 a year ago.
For the current quarter, Barnes Group is expected to post earnings of $0.48 per share, indicating a change of -12.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Barnes Group. Also, the stock has a VGM Score of D.
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Why Is Middleby (MIDD) Up 1.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Middleby (MIDD - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Middleby due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Middleby Acquires Escher Mixers, Adds to Bakery Brands
Middleby reported third-quarter 2022 adjusted earnings (excluding 26 cents from non-recurring items) of $2.18 per share, which missed the Zacks Consensus Estimate of $2.36. The bottom line increased 13.5% year over year on higher sales.
Net sales of $992.9 million missed the Zacks Consensus Estimate of $1,021.3 million. The top line jumped 21.5% year over year. Organic revenues in the reported quarter increased 14.2% year over year due to improved market conditions and strong consumer demand. Acquired assets boosted sales by 10.9%, while movements in foreign currencies had a negative impact of 3.6%.
Segmental Results
Sales from the Commercial Foodservice Equipment Group (representing 62.8% of the net sales) were $623.66 million, up 21.9% year over year. Organic sales in the reported quarter increased 17%. Buyouts boosted sales by 7.4%, while movements in foreign currencies had a headwind of 2.5%.
Sales from the Residential Kitchen Equipment Group (representing 22.3% of the reported quarter’s net sales) totaled $220.97 million, up 14.3% year over year. Organic sales in the quarter under review increased 2.3%. Buyouts had a positive impact of 17.7%, whereas movements in foreign currencies had a negative impact of 5.7%.
Sales from the Food Processing Equipment Group (representing 14.9% of the reported net sales) summed $148.24 million, up 31.6% year over year. Organic sales in the quarter jumped 21.7%, while movements in foreign currencies had a negative impact of 4.8%.
Margin Profile
In the third quarter, Middleby’s cost of sales increased 21.2% year over year to $627.64 million. Gross profit expanded 21.9% to $365.23 million. Gross margin increased to 36.8% from 36.6% in the year-ago quarter.
Selling, general and administrative expenses increased 14.7% year over year to $201.20 million. Operating income in the third quarter dropped 30.7% year over year to $161.71 million. Operating margin decreased to 16.3% from 28.6% in the year-ago period.
Balance Sheet and Cash Flow
Exiting the third quarter, Middleby had cash and cash equivalents of $144.92 million compared with $180.36 million at the end of December 2021. Long-term debt was $2.69 billion at the end of the third quarter compared with $2.39 billion at the end of 2021.
In the first nine months of 2022, MIDD generated net cash of $173.45 million from operating activities compared with $346.04 million at the end of the year-ago period. Capital expenditure (net of sale proceeds) totaled $50.91 million compared with $23.67 million at the end of the first nine months of 2022. Free cash flow was $122.54 million in the first nine months of 2022, down 62% from the year-ago period.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.46% due to these changes.
VGM Scores
Currently, Middleby has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Middleby has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Middleby is part of the Zacks Manufacturing - General Industrial industry. Over the past month, Barnes Group (B - Free Report) , a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended September 2022 more than a month ago.
Barnes Group reported revenues of $314.74 million in the last reported quarter, representing a year-over-year change of -3.2%. EPS of $0.49 for the same period compares with $0.55 a year ago.
For the current quarter, Barnes Group is expected to post earnings of $0.48 per share, indicating a change of -12.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Barnes Group. Also, the stock has a VGM Score of D.