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Altra Industrial (AIMC) Beats Q2 Earnings, Keeps '16 View
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Machinery company Altra Industrial Motion Corporation kept its earnings streak alive in second-quarter 2016. The company’s non-GAAP earnings of 42 cents per share surpassed the Zacks Consensus Estimate of 39 cents by 7.7%. However, the bottom line lagged the year-ago tally of 43 cents by 2.3%.
Talking about Altra Industrial Motion’s top-line results, revenues in the quarter totaled $182.7 million, down 7.1% year over year. The year-over-year fall was triggered by a 6.1% decline in organic revenues and 1% adverse impact from foreign currency translation.
Also, the top line was below the Zacks Consensus Estimate of $184 million.
Segmental Details
Altra Industrial Motion reports its revenues under the following heads/segments: Couplings Clutches & Brakes, Electromagnetic Clutches & Brakes, and Gearing. A brief snapshot of the segmental sales has been provided below:
Electromagnetic Clutches & Brakes revenues declined 2.1% year over year to $57.1 million. Couplings Clutches & Brakes sales were recorded at $78.2 million, down 13.5%. Sales in the Gearing segment totaled $49.1 million, down 1%.
Margins
In the quarter, Altra Industrial Motion’s cost of sales declined 8.9%, representing 68.1% of revenue versus 69.5% in the year-ago quarter. Gross margin increased 140 bps year over year to 31.9%. Selling, general and administrative expenses were roughly $35.9 million, accounting for 19.6% of revenues.
Balance Sheet & Cash Flow
Exiting second-quarter 2016, Altra Industrial Motion had cash and cash equivalents of $34.3 million, down from $44.8 million recorded in the preceding quarter. Long-term debt declined 9.6% sequentially to $210.5 million.
In the six months ended Jun 30, 2016 Altra Industrial Motion generated cash of $30.5 million from its operating activities, slightly above its year-ago amount of $30.1 million. Cash used on purchase of property, plant and equipment totaled $10.9 million down from $13.5 million in the year-ago period. During the first half of 2016, the company repurchased shares worth $4.4 million and paid dividends worth $3.9 million.
Exiting the period, Altra Industrial Motion had approximately $10.7 million of authorization left under its $50 million share buyback program approved in May 2014.
Prior to the earnings release on Jul 20, Altra Industrial Motion announced that its board of directors has approved payment of a quarterly cash dividend of 15 cents per share. The payment will be made on Oct 4 to shareholders of record as on Sep 19.
Outlook: For 2016, Altra Industrial Motion reaffirmed its 2016 guidance in which sales are expected within $700−$720 million, while non-GAAP earnings are anticipated in a range of $1.40−$1.50 per share. Tax rate is expected within roughly 29−31%. Capital expenditure will likely come in a band of $20−$24 million, while depreciation will be $30−$32 million.
In 2015, Altra Industrial Motion had initiated certain restructuring and cost-saving strategies to keep costs under control and align its business operations with current demand levels. The company intends to lower the number of its facilities by 20−30% as well as improve its supply chain worldwide. These initiatives are expected to be completed by 2018. As part of these restructuring activities, the company completed five facility consolidations in the quarter while two other consolidations are underway. The company anticipates reaping $5 million savings from these consolidations.
With a market capitalization of $727 million, Altra Industrial Motion currently carries a Zacks Rank #3 (Hold). However, there are some machinery companies performing better than Altra Industrial, and hence, have gained high investment values. These companies include Nordson Corporation (NDSN - Free Report) , Ingersoll-Rand Plc (IR - Free Report) and Luxfer Holdings PLC (LXFR - Free Report) . While Nordson Corporation sports a Zacks Rank #1 (Strong Buy), both Ingersoll-Rand and Luxfer Holdings carry a Zacks Rank #2 (Buy).
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Altra Industrial (AIMC) Beats Q2 Earnings, Keeps '16 View
Machinery company Altra Industrial Motion Corporation kept its earnings streak alive in second-quarter 2016. The company’s non-GAAP earnings of 42 cents per share surpassed the Zacks Consensus Estimate of 39 cents by 7.7%. However, the bottom line lagged the year-ago tally of 43 cents by 2.3%.
Talking about Altra Industrial Motion’s top-line results, revenues in the quarter totaled $182.7 million, down 7.1% year over year. The year-over-year fall was triggered by a 6.1% decline in organic revenues and 1% adverse impact from foreign currency translation.
Also, the top line was below the Zacks Consensus Estimate of $184 million.
Segmental Details
Altra Industrial Motion reports its revenues under the following heads/segments: Couplings Clutches & Brakes, Electromagnetic Clutches & Brakes, and Gearing. A brief snapshot of the segmental sales has been provided below:
Electromagnetic Clutches & Brakes revenues declined 2.1% year over year to $57.1 million. Couplings Clutches & Brakes sales were recorded at $78.2 million, down 13.5%. Sales in the Gearing segment totaled $49.1 million, down 1%.
Margins
In the quarter, Altra Industrial Motion’s cost of sales declined 8.9%, representing 68.1% of revenue versus 69.5% in the year-ago quarter. Gross margin increased 140 bps year over year to 31.9%. Selling, general and administrative expenses were roughly $35.9 million, accounting for 19.6% of revenues.
Balance Sheet & Cash Flow
Exiting second-quarter 2016, Altra Industrial Motion had cash and cash equivalents of $34.3 million, down from $44.8 million recorded in the preceding quarter. Long-term debt declined 9.6% sequentially to $210.5 million.
In the six months ended Jun 30, 2016 Altra Industrial Motion generated cash of $30.5 million from its operating activities, slightly above its year-ago amount of $30.1 million. Cash used on purchase of property, plant and equipment totaled $10.9 million down from $13.5 million in the year-ago period. During the first half of 2016, the company repurchased shares worth $4.4 million and paid dividends worth $3.9 million.
Exiting the period, Altra Industrial Motion had approximately $10.7 million of authorization left under its $50 million share buyback program approved in May 2014.
Prior to the earnings release on Jul 20, Altra Industrial Motion announced that its board of directors has approved payment of a quarterly cash dividend of 15 cents per share. The payment will be made on Oct 4 to shareholders of record as on Sep 19.
Outlook: For 2016, Altra Industrial Motion reaffirmed its 2016 guidance in which sales are expected within $700−$720 million, while non-GAAP earnings are anticipated in a range of $1.40−$1.50 per share. Tax rate is expected within roughly 29−31%. Capital expenditure will likely come in a band of $20−$24 million, while depreciation will be $30−$32 million.
In 2015, Altra Industrial Motion had initiated certain restructuring and cost-saving strategies to keep costs under control and align its business operations with current demand levels. The company intends to lower the number of its facilities by 20−30% as well as improve its supply chain worldwide. These initiatives are expected to be completed by 2018. As part of these restructuring activities, the company completed five facility consolidations in the quarter while two other consolidations are underway. The company anticipates reaping $5 million savings from these consolidations.
ALTRA INDUS MOT Price, Consensus and EPS Surprise
ALTRA INDUS MOT Price, Consensus and EPS Surprise | ALTRA INDUS MOT Quote
Zacks Rank & Stocks to Consider
With a market capitalization of $727 million, Altra Industrial Motion currently carries a Zacks Rank #3 (Hold). However, there are some machinery companies performing better than Altra Industrial, and hence, have gained high investment values. These companies include Nordson Corporation (NDSN - Free Report) , Ingersoll-Rand Plc (IR - Free Report) and Luxfer Holdings PLC (LXFR - Free Report) . While Nordson Corporation sports a Zacks Rank #1 (Strong Buy), both Ingersoll-Rand and Luxfer Holdings carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>