It has been about a month since the last earnings report for Milacron Holdings Corp. . Shares have lost about 3.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.
Milacron Q4 Earnings Beat, Revenues Miss Estimates
Milacron Holdings Corp reported fourth-quarter fiscal 2016 adjusted earnings per share of $0.47, a 2% decline from $0.48 in the year-ago quarter. However, earnings beat the Zacks Consensus Estimate of $0.35 by a margin of 34%.
Including one-time items, the company reported earnings per share of $0.02 in the quarter compared with $0.22 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.
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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
VGM Scores
At this time, Milacron's stock has an average score of 'C' on both growth momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth and momentum investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions has been net zero. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Milacron (MCRN) Down 3.3% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Milacron Holdings Corp. . Shares have lost about 3.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 catalysts.
Milacron Q4 Earnings Beat, Revenues Miss Estimates
Milacron Holdings Corp reported fourth-quarter fiscal 2016 adjusted earnings per share of $0.47, a 2% decline from $0.48 in the year-ago quarter. However, earnings beat the Zacks Consensus Estimate of $0.35 by a margin of 34%.
Including one-time items, the company reported earnings per share of $0.02 in the quarter compared with $0.22 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.
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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
Milacron Holdings Corp. Price and Consensus
Milacron Holdings Corp. Price and Consensus | Milacron Holdings Corp. Quote
VGM Scores
At this time, Milacron's stock has an average score of 'C' on both growth momentum front. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth and momentum investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions has been net zero. It comes with little surprise that the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.