Back to top

Image: Bigstock

Aegion (AEGN) Q4 Earnings Beat on Estimates, Revenues Lag

Read MoreHide Full Article

Aegion Corporation reported fourth-quarter 2016 adjusted earnings of 44 cents per share, which increased around 22% year over year. Earnings comfortably beat the Zacks Consensus Estimate of 34 cents. Including one-time items, Aegion reported profit of 52 cents per share in the quarter compared to a loss of 91 cents recorded in the prior-year quarter.

Operational Update

Total revenue of $321.8 million in the quarter declined 2.7% year over year. In addition, revenues fell short of the Zacks Consensus Estimate of $337 million.

Adjusted cost of sales decreased 13% to $250 million from $263 million in the year-ago quarter. Adjusted gross profit increased 5.8% to $71.4 million from $67.5 million in the prior-year quarter. Adjusted gross margin expanded 180 basis points (bps) year over year to 22.2%.

Deere & Company Price, Consensus and EPS Surprise

 

Deere & Company Price, Consensus and EPS Surprise | Deere & Company Quote

Adjusted operating expenses climbed 8.3% year over year to $49.5 million. Adjusted operating income was $21.9 million, up 0.5% year over year. Operating margin in the quarter came in at 6.8%, expanding 20 bps from the year-ago quarter.

Segmental Performance

Revenues from the Infrastructure Solutions segment inched up 1.4% year over year to $137 million. The segment’s adjusted operating income plummeted 31.9% year over year to $10.4 million.

The Corrosion Protection segment’s revenues rose 9.9% to $119.5 million from $108.8 million in the comparable quarter last year. The segment reported an adjusted operating profit of $10 million, a whopping 268.7% surge from $2.7 million in the year-ago quarter.

Revenues in the Energy Services segment plunged 25% year over year to $65 million. The segment reported an adjusted operating profit of $1.4 million compared with $3.8 million in the prior-year quarter.

Financial Update

Aegion had cash and cash equivalents of $129.5 million as of Dec 31, 2016 compared with $209 million at the end of 2015. The company recorded cash flow from operations of $73.2 million as of Dec 31, 2016 compared with $132 million as of Dec 31, 2015.

Aegion’s consolidated backlog came in at $689.6 million as of Dec 31, 2016, down 11% year over year.

2016 Performance

Aegion posted earnings of $1.10 per share for 2016, down 14% year over year. Earnings beat the Zacks Consensus Estimate of $1.00. Revenues for full-year 2016 dipped 8.4% year over year at $1.22 billion. Revenues also missed the Zacks Consensus Estimate of $1.24 billion.

Outlook

For 2017, Aegion expects higher revenues and operating income across all three platforms to result in solid earnings per share growth, greater cash generation and increasing ROIC. This positive outlook reflects its assessment of growing end markets, including an improving environment for oil & gas infrastructure, the anticipated completion of the large deepwater pipe coating and insulation project, and consistent execution of long-term growth strategy.

Aegion projects 2017 revenue growth for Infrastructure Solutions to exceed the low- to mid-single digit three-year target at modestly lower operating margins compared to the 9.8% adjusted operating margin achieved in 2016.

The company guided Corrosion Protection’s revenue growth of mid-teens and mid-single digit operating margins led by the planned contribution from the deepwater pipe coating and insulation project, and anticipated modest recovery in the energy markets. Further, the company anticipates Energy Services’ revenues to grow in mid-single digits, in line with the three-year growth target, with operating margins above the fourth-quarter 2016 levels.

Share Price Performance

In the last one year, Aegion has underperformed the Zacks classified Building & Construction Products Miscellaneous sub-industry with respect to price performance. The stock gained around 15.3%, while the industry rose 34.6% over the same time frame.


Zacks Rank & Key Picks

Aegion currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the sector include Owens Corning (OC - Free Report) , PulteGroup, Inc. (PHM - Free Report) and Louisiana-Pacific Corporation (LPX - Free Report) . All of the three stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Owens Corning has an earnings ESP of 35.13% for the trailing four quarters. PulteGroup has an average earnings surprise of 13.49% for the last four quarters, while Louisiana-Pacific has an average earnings surprise of 66.28% for the past four quarters.

Everything You Need to Know About Snapchat BEFORE It Goes Public

You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?

In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with
jaw-dropping growth. Each could go public in the coming months.

Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


PulteGroup, Inc. (PHM) - $25 value - yours FREE >>

Louisiana-Pacific Corporation (LPX) - $25 value - yours FREE >>

Owens Corning Inc (OC) - $25 value - yours FREE >>

Published in