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EnPro Industries Inc. (NPO - Free Report) reported lower-than-expected results for first-quarter 2017, with both earnings and revenues lagging their respective Zacks Consensus Estimates by 6.4% and 0.1%. This was the company’s third consecutive quarter of weak results.
The company’s adjusted earnings came in at 44 cents per share, below the Zacks Consensus Estimate of 47 cents. However, the bottom line improved over loss of 1 cent per share recorded in the year-ago quarter.
The company’s net sales totaled $295.8 million, below the Zacks Consensus Estimate of $296 million. However, the top line inched up 0.3% year over year on the back of strengthening business in semiconductor, food & pharma and aerospace end markets and improvements in oil & gas and automotive. Demand in industrial gas turbines, general industrial and nuclear was flat but declined in heavy-duty trucking.
In addition, the company cited that acquisition gains of 1.1% positively impacted sales while forex woes of 1.1% influenced sales adversely.
Segmental Revenues
EnPro Industries classifies its revenue results under three segments. A brief snapshot of segmental sales has been provided below:
Sealing Products revenues were up 4.1% year over year to $179.3 million. Engineered Products sales were recorded at $75.1 million, up 1.9% year over year. Sales in the Power Systems segment were $42.4 million, down 15.2% year over year.
Margins
In the quarter, EnPro Industries’ cost of sales decreased 1.6% year over year and represented 65.7% of net sales versus 66.9% recorded in the year-ago quarter. Gross margin improved 120 basis points to 34.3%. Selling, general and administrative expenses were roughly $72.9 million, accounting for 24.6% of revenues.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter were $42.7 million, up 59.3% year over year while adjusted EBITDA margin was 14.4%.
Balance Sheet & Cash Flow
Exiting the first quarter, EnPro Industries had cash and cash equivalents of $113.7 million, up from $111.5 million in the preceding quarter. Long-term debt was $468.8 million, increasing 10.4% sequentially.
In the quarter, the company used net cash of $19.6 million, lower than $28.4 million used in the year-ago quarter. Cash used for purchase of property, plant and equipment totaled $11.1 million, above $6.1 million in the year-ago period.
During the quarter, the company paid approximately $4.7 million as dividend and repurchased 60,800 shares worth $3.6 million.
Outlook
Over the long term, EnPro Industries anticipates benefiting from product innovation, operational efficiency, strategic acquisitions and cost-savings initiatives.
With a market capitalization of approximately $1.55 billion, EnPro Industries currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked machinery stocks 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 seethe 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 reported an average positive earnings surprise of 13.88% in the trailing four quarters. 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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Image: Bigstock
EnPro Industries (NPO) Q1 Earnings & Sales Lag, Rise Y/Y
EnPro Industries Inc. (NPO - Free Report) reported lower-than-expected results for first-quarter 2017, with both earnings and revenues lagging their respective Zacks Consensus Estimates by 6.4% and 0.1%. This was the company’s third consecutive quarter of weak results.
The company’s adjusted earnings came in at 44 cents per share, below the Zacks Consensus Estimate of 47 cents. However, the bottom line improved over loss of 1 cent per share recorded in the year-ago quarter.
The company’s net sales totaled $295.8 million, below the Zacks Consensus Estimate of $296 million. However, the top line inched up 0.3% year over year on the back of strengthening business in semiconductor, food & pharma and aerospace end markets and improvements in oil & gas and automotive. Demand in industrial gas turbines, general industrial and nuclear was flat but declined in heavy-duty trucking.
In addition, the company cited that acquisition gains of 1.1% positively impacted sales while forex woes of 1.1% influenced sales adversely.
Segmental Revenues
EnPro Industries classifies its revenue results under three segments. A brief snapshot of segmental sales has been provided below:
Sealing Products revenues were up 4.1% year over year to $179.3 million. Engineered Products sales were recorded at $75.1 million, up 1.9% year over year. Sales in the Power Systems segment were $42.4 million, down 15.2% year over year.
Margins
In the quarter, EnPro Industries’ cost of sales decreased 1.6% year over year and represented 65.7% of net sales versus 66.9% recorded in the year-ago quarter. Gross margin improved 120 basis points to 34.3%. Selling, general and administrative expenses were roughly $72.9 million, accounting for 24.6% of revenues.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter were $42.7 million, up 59.3% year over year while adjusted EBITDA margin was 14.4%.
Balance Sheet & Cash Flow
Exiting the first quarter, EnPro Industries had cash and cash equivalents of $113.7 million, up from $111.5 million in the preceding quarter. Long-term debt was $468.8 million, increasing 10.4% sequentially.
In the quarter, the company used net cash of $19.6 million, lower than $28.4 million used in the year-ago quarter. Cash used for purchase of property, plant and equipment totaled $11.1 million, above $6.1 million in the year-ago period.
During the quarter, the company paid approximately $4.7 million as dividend and repurchased 60,800 shares worth $3.6 million.
Outlook
Over the long term, EnPro Industries anticipates benefiting from product innovation, operational efficiency, strategic acquisitions and cost-savings initiatives.
EnPro Industries Price and Consensus
EnPro Industries Price and Consensus | EnPro Industries Quote
Zacks Rank & Key Picks
With a market capitalization of approximately $1.55 billion, EnPro Industries currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked machinery stocks 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 reported an average positive earnings surprise of 13.88% in the trailing four quarters. 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.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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