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Milacron (MCRN) Q4 Earnings Beat, Revenues Miss Estimates
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Milacron Holdings Corp reported fourth-quarter fiscal 2016 adjusted earnings per share of 47 cents, a 2% decline from 48 cents in the year-ago quarter. However, earnings beat the Zacks Consensus Estimate of 35 cents by a margin of 34%.
Including one-time items, the company reported earnings per share of 2 cents in the quarter compared with 22 cents per share in the year-ago quarter.
Operational Update
Milacron reported revenues of $289 million, a 5.6% dip year over year. Revenues missed the Zacks Consensus Estimate of $294 million. Excluding the unfavorable impact of foreign currency, sales for the quarter slipped 4.1% from the prior-year period.
Cost of sales during the quarter went down 5% year over year to $196 million compared with the prior-year quarter. Gross profit declined 8% year over year to $92.7 million with gross margin contracting 70 basis points to 32.1%.
Selling, general and administrative expenses went up 22% year over year to $65 million. Milacron reported adjusted operating profit of $71 million which increased 29% from $55 million in the year-ago quarter. Adjusted EBITDA went down 9% to $53.6 million for the quarter from $58.9 million in the prior-year quarter.
Segment Results
Advanced Plastic Processing Technologies: Net sales were down 13% year over year to $160 million. Excluding $1.6 million of unfavorable effects of currency movements, sales decreased 12.5% over the prior-year quarter. Adjusted EBITDA declined 17% year over year to $20.2 million.
Melt Delivery and Control Systems: Net sales went up 7% year over year to $101 million aided by continued growth in hot runners. Excluding unfavorable influence of currency movements of $2 million, sales advanced 9.3% over the prior-year period. Adjusted EBITDA improved 3% to $32.6 million.
Fluid Technologies: Net sales went up 3% year over year to $28 million. Excluding $0.9 million of unfavorable effects of currency movements, sales increased 5.9% over the prior-year period. Adjusted EBITDA decreased 11% to $5.9 million.
Milacron Holdings Corp. Price, Consensus and EPS Surprise
As of Dec 31, 2016, Milacron had cash and cash equivalents of $130 million compared with $67.5 million as of Dec 31, 2015. The company generated $116 million in cash from operating activities in the 2016 compared with $23 million in the prior year. Long-term debt was $934.1 million as of Dec 31, 2016, compared with $932 million as of Dec 31, 2015.
Fiscal 2016 Performance
Milacron reported adjusted earnings per share of $1.51 in fiscal 2016 compared with $1.40 in fiscal 2015. Earnings beat the Zacks Consensus Estimate of $1.39. Including one-time items, earnings were pegged at 43 cents compared with a loss per share of 65 cents in the prior year. Revenues edged down 1% year over year to $1,167 million, short of the Zacks Consensus Estimate of $1,171 million.
Outlook
The company remain cautious regarding 2017 given the global economic uncertainty. Milacron projects organic sales growth to be between 0% and 2% in 2017 and adjusted EBITDA to lie in the range of $219–$225 million. Free Cash Flow is forecasted to be between $95 million and $105 million. Capital expenditures are projected at approximately $50 million, interest expense to be approximately $43 million, cash taxes to be between $28 and $32 million. Effective tax rate will be approximately 27% and shares outstanding to be approximately 72 million.
A look at the company’s share price movement in the past year reveals that Milacron has outpaced the Zacks categorized Manufacturing-Material Handling sub industry. The stock has gained 36.4%, ahead of the sub industry’s rise of 33.5% in the same time frame.
Kennametal has delivered an average positive earnings surprise of 9.90% in the last four quarters. Kennametal shares have soared 91.6% in the past one year. Roper Technologies has delivered an average positive earnings surprise of 0.92% in the trailing four quarters and its shares have gained 23% in the past one year period. II-VI Incorporated has an average positive earnings surprise of 59.23% in the past four quarters. Its shares have gained 72.6% in the past one year.
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Milacron (MCRN) Q4 Earnings Beat, Revenues Miss Estimates
Milacron Holdings Corp reported fourth-quarter fiscal 2016 adjusted earnings per share of 47 cents, a 2% decline from 48 cents in the year-ago quarter. However, earnings beat the Zacks Consensus Estimate of 35 cents by a margin of 34%.
Including one-time items, the company reported earnings per share of 2 cents in the quarter compared with 22 cents per share in the year-ago quarter.
Operational Update
Milacron reported revenues of $289 million, a 5.6% dip year over year. Revenues missed the Zacks Consensus Estimate of $294 million. Excluding the unfavorable impact of foreign currency, sales for the quarter slipped 4.1% from the prior-year period.
Cost of sales during the quarter went down 5% year over year to $196 million compared with the prior-year quarter. Gross profit declined 8% year over year to $92.7 million with gross margin contracting 70 basis points to 32.1%.
Selling, general and administrative expenses went up 22% year over year to $65 million. Milacron reported adjusted operating profit of $71 million which increased 29% from $55 million in the year-ago quarter. Adjusted EBITDA went down 9% to $53.6 million for the quarter from $58.9 million in the prior-year quarter.
Segment Results
Advanced Plastic Processing Technologies: Net sales were down 13% year over year to $160 million. Excluding $1.6 million of unfavorable effects of currency movements, sales decreased 12.5% over the prior-year quarter. Adjusted EBITDA declined 17% year over year to $20.2 million.
Melt Delivery and Control Systems: Net sales went up 7% year over year to $101 million aided by continued growth in hot runners. Excluding unfavorable influence of currency movements of $2 million, sales advanced 9.3% over the prior-year period. Adjusted EBITDA improved 3% to $32.6 million.
Fluid Technologies: Net sales went up 3% year over year to $28 million. Excluding $0.9 million of unfavorable effects of currency movements, sales increased 5.9% over the prior-year period. Adjusted EBITDA decreased 11% to $5.9 million.
Milacron Holdings Corp. Price, Consensus and EPS Surprise
Milacron Holdings Corp. Price, Consensus and EPS Surprise | Milacron Holdings Corp. Quote
Financial Update
As of Dec 31, 2016, Milacron had cash and cash equivalents of $130 million compared with $67.5 million as of Dec 31, 2015. The company generated $116 million in cash from operating activities in the 2016 compared with $23 million in the prior year. Long-term debt was $934.1 million as of Dec 31, 2016, compared with $932 million as of Dec 31, 2015.
Fiscal 2016 Performance
Milacron reported adjusted earnings per share of $1.51 in fiscal 2016 compared with $1.40 in fiscal 2015. Earnings beat the Zacks Consensus Estimate of $1.39. Including one-time items, earnings were pegged at 43 cents compared with a loss per share of 65 cents in the prior year. Revenues edged down 1% year over year to $1,167 million, short of the Zacks Consensus Estimate of $1,171 million.
Outlook
The company remain cautious regarding 2017 given the global economic uncertainty. Milacron projects organic sales growth to be between 0% and 2% in 2017 and adjusted EBITDA to lie in the range of $219–$225 million. Free Cash Flow is forecasted to be between $95 million and $105 million. Capital expenditures are projected at approximately $50 million, interest expense to be approximately $43 million, cash taxes to be between $28 and $32 million. Effective tax rate will be approximately 27% and shares outstanding to be approximately 72 million.
A look at the company’s share price movement in the past year reveals that Milacron has outpaced the Zacks categorized Manufacturing-Material Handling sub industry. The stock has gained 36.4%, ahead of the sub industry’s rise of 33.5% in the same time frame.
Zacks Rank
Milacron currently carries a Zacks Rank #2 (Buy).
Some other stocks worth considering in the industrial products sector include Kennametal Inc. (KMT - Free Report) , Roper Technologies, Inc. (ROP - Free Report) and II-VI Incorporated . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kennametal has delivered an average positive earnings surprise of 9.90% in the last four quarters. Kennametal shares have soared 91.6% in the past one year. Roper Technologies has delivered an average positive earnings surprise of 0.92% in the trailing four quarters and its shares have gained 23% in the past one year period. II-VI Incorporated has an average positive earnings surprise of 59.23% in the past four quarters. Its shares have gained 72.6% in the past one year.
Zacks' Top 10 Stocks for 2017 In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017? Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>