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Altra Industrial (AIMC) Tops Q1 Earnings, Raises '17 View
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Machinery company Altra Industrial Motion Corporation kept its earnings streak alive in first-quarter 2017, with its earnings and revenues surpassing their respective estimates by 32.5% and 1.01%.
Non-GAAP earnings in the quarter came in at 53 cents per share, above the Zacks Consensus Estimate of 40 cents. Also, the bottom line grew 39.5% from the year-ago tally of 38 cents.
The company’s revenues totaled $215.4 million, increasing 19.3% year over year. The year-over-year improvement was triggered by 1.6% growth in organic revenues and 19.2% positive impact from the Stromag acquisition.
Also, the top line was above the Zacks Consensus Estimate of $213 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 increased 11.4% year over year to $63.9 million. Couplings Clutches & Brakes sales were recorded at $106.2 million, up 40.5% year over year. Sales in the Gearing segment totaled $47.0 million, down 3.9% year over year.
Margins
In the quarter, Altra Industrial Motion’s cost of sales increased 18.6% year over year, representing 69.3% of revenues compared with 69.7% in the year-ago quarter. Gross margin increased 40 basis points (bps) year over year to 30.7%. Selling, general and administrative expenses were roughly $40.3 million, accounting for 18.7% of revenues.
Balance Sheet & Cash Flow
Exiting the first quarter, Altra Industrial Motion had cash and cash equivalents of $52.9 million, down from $69.1 million in the preceding quarter. Long-term debt was at $317.6 million, down 2.6% from $326 million in the previous quarter.
In the quarter, the company generated cash of approximately $3 million from its operating activities, below the year-ago tally of $6.1 million. Capital spending was $7.3 million, up from $5.7 million in the year-ago period. During the period, the company paid dividends amounting to $3.9 million.
Outlook
For 2017, Altra Industrial Motion anticipates benefiting from the steadily improving end-markets, savings from cost-reduction initiatives and synergistic benefits from the Stromag acquisition. On the back of these expectations as well as impressive first-quarter results, the company revised its revenue guidance to $840–$855 million compared with the previous projection of $835–$855 million.
Non-GAAP earnings are anticipated to be within $1.83–$1.93 per share range, up from the earlier forecast of $1.75–$1.85. Tax rate will be 29–31%, down from 30−32% expected earlier. Capital spending will be within $25–$30 million range.
In 2015, Altra Industrial Motion initiated certain restructuring and cost-saving strategies to keep costs under control and align its business operations with the 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. In the first quarter, the company consolidated two facilities and will close another one by the end of the year. Total savings anticipated from these activities will likely exceed $7 million.
With a market capitalization of $1.29 billion, Altra Industrial Motion currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Applied Industrial Technologies, Inc. (AIT - Free Report) , Graco Inc. (GGG - Free Report) and Parker-Hannifin Corporation (PH - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies’ financial performance was impressive, with an average positive earnings surprise of 9.78% for the last four quarters. Also, earnings estimates for fiscal 2017 and fiscal 2018 were revised upward over the last 60 days.
Graco Inc. reported an average positive earnings surprise of 13.88%. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.
Parker-Hannifin Corporation’ financial performance was impressive, with an average positive earnings surprise of 14.94% for the last four quarters. Also, earnings estimates for fiscal 2017 and fiscal 2018 were revised upward over the last 60 days.
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Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Altra Industrial (AIMC) Tops Q1 Earnings, Raises '17 View
Machinery company Altra Industrial Motion Corporation kept its earnings streak alive in first-quarter 2017, with its earnings and revenues surpassing their respective estimates by 32.5% and 1.01%.
Non-GAAP earnings in the quarter came in at 53 cents per share, above the Zacks Consensus Estimate of 40 cents. Also, the bottom line grew 39.5% from the year-ago tally of 38 cents.
The company’s revenues totaled $215.4 million, increasing 19.3% year over year. The year-over-year improvement was triggered by 1.6% growth in organic revenues and 19.2% positive impact from the Stromag acquisition.
Also, the top line was above the Zacks Consensus Estimate of $213 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 increased 11.4% year over year to $63.9 million. Couplings Clutches & Brakes sales were recorded at $106.2 million, up 40.5% year over year. Sales in the Gearing segment totaled $47.0 million, down 3.9% year over year.
Margins
In the quarter, Altra Industrial Motion’s cost of sales increased 18.6% year over year, representing 69.3% of revenues compared with 69.7% in the year-ago quarter. Gross margin increased 40 basis points (bps) year over year to 30.7%. Selling, general and administrative expenses were roughly $40.3 million, accounting for 18.7% of revenues.
Balance Sheet & Cash Flow
Exiting the first quarter, Altra Industrial Motion had cash and cash equivalents of $52.9 million, down from $69.1 million in the preceding quarter. Long-term debt was at $317.6 million, down 2.6% from $326 million in the previous quarter.
In the quarter, the company generated cash of approximately $3 million from its operating activities, below the year-ago tally of $6.1 million. Capital spending was $7.3 million, up from $5.7 million in the year-ago period. During the period, the company paid dividends amounting to $3.9 million.
Outlook
For 2017, Altra Industrial Motion anticipates benefiting from the steadily improving end-markets, savings from cost-reduction initiatives and synergistic benefits from the Stromag acquisition. On the back of these expectations as well as impressive first-quarter results, the company revised its revenue guidance to $840–$855 million compared with the previous projection of $835–$855 million.
Non-GAAP earnings are anticipated to be within $1.83–$1.93 per share range, up from the earlier forecast of $1.75–$1.85. Tax rate will be 29–31%, down from 30−32% expected earlier. Capital spending will be within $25–$30 million range.
In 2015, Altra Industrial Motion initiated certain restructuring and cost-saving strategies to keep costs under control and align its business operations with the 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. In the first quarter, the company consolidated two facilities and will close another one by the end of the year. Total savings anticipated from these activities will likely exceed $7 million.
Altra Industrial Motion Corp. Price and Consensus
Altra Industrial Motion Corp. Price and Consensus | Altra Industrial Motion Corp. Quote
Zacks Rank & Key Picks
With a market capitalization of $1.29 billion, Altra Industrial Motion currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Applied Industrial Technologies, Inc. (AIT - Free Report) , Graco Inc. (GGG - Free Report) and Parker-Hannifin Corporation (PH - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies’ financial performance was impressive, with an average positive earnings surprise of 9.78% for the last four quarters. Also, earnings estimates for fiscal 2017 and fiscal 2018 were revised upward over the last 60 days.
Graco Inc. reported an average positive earnings surprise of 13.88%. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.
Parker-Hannifin Corporation’ financial performance was impressive, with an average positive earnings surprise of 14.94% for the last four quarters. Also, earnings estimates for fiscal 2017 and fiscal 2018 were revised upward over the last 60 days.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>