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Machinery company Colfax Corporation reported better-than-expected results in first-quarter 2017, with earnings per share and revenues surpassing their respective estimates by 16.67% and 2.81%.
The company’s adjusted earnings came in at 35 cents per share, above the Zacks Consensus Estimate of 30 cents. Also, the bottom line grew 16.67% above the year-ago tally of 30 cents.
Net sales in the quarter totaled $844.9 million, beating the Zacks Consensus Estimate of $822 million. However, the top line decreased roughly 3.6% from the year-ago tally of $876.8 million, primarily due to 4.1% fall in existing businesses and 0.2% negative impact from adverse foreign currency movements, partially offset by 0.7% gain from acquired assets.
Segmental Revenues
Colfax reports its net sales under two heads/segments. The segmental results are briefly discussed below:
Revenues from Gas and Fluid Handling totaled $384.9 million, down 11% year over year. The decline was triggered by 9.3% fall in the existing businesses and 1.7% adverse impact from foreign currency translations.
Organically, sales declined 27.1% in oil, gas & petrochemical, 10.1% in power generation and 7.1% in general industrial & other end markets. These negatives were partially offset by 40.4% gain in mining and 10.2% gain in marine end markets.
The segment’s orders were worth $445.2 million at the end of the quarter, up 9.6% year over year. Backlog was $1,084.7 million.
Revenues from Fabrication Technology grew 3.6% year over year to $460 million due to 1.8% positive impact from price/mix, 1.4% gain from acquired assets and 1.1% positive impact from foreign currency translations, partially offset by 0.7% decline in volumes.
Margins
In the quarter, Colfax’s cost of sales decreased 5.2% year over year, representing 66.9% of net sales compared with 68% in the year-ago quarter. Gross margin increased 110 basis points (bps) year over year to 33.1%. Selling, general and administrative expenses, roughly 24.4% as a percentage of revenues, declined 3.9% year over year.
Adjusted operating income grew 10.9% year over year while margin grew 120 bps to 8.7%.
Balance Sheet and Cash Flow
Exiting the first quarter, Colfax had cash and cash equivalents of $207.8 million, down from $221.7 million recorded at previous quarter end. Long-term debt balance was down 3.3% sequentially to $1,244.9 million.
In the quarter, the company generated net cash of $40.4 million from its operating activities, up from $15.5 million generated in the year-ago quarter. Capital spending totaled $11.7 million, decreasing 23.9% year over year.
Outlook
For 2017, Colfax increased its adjusted earnings guidance to $1.60−$1.75 per share from the previous projection of $1.55−$1.70. Also, the company announced that it is on track to deliver roughly $50 million in cost savings from its restructuring efforts.
With a market capitalization of approximately $4.93 billion, Colfax currently carries a Zacks Rank #3 (Hold). 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.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Colfax (CFX) Beats Q1 Earnings & Sales, Raises '17 View
Machinery company Colfax Corporation reported better-than-expected results in first-quarter 2017, with earnings per share and revenues surpassing their respective estimates by 16.67% and 2.81%.
The company’s adjusted earnings came in at 35 cents per share, above the Zacks Consensus Estimate of 30 cents. Also, the bottom line grew 16.67% above the year-ago tally of 30 cents.
Net sales in the quarter totaled $844.9 million, beating the Zacks Consensus Estimate of $822 million. However, the top line decreased roughly 3.6% from the year-ago tally of $876.8 million, primarily due to 4.1% fall in existing businesses and 0.2% negative impact from adverse foreign currency movements, partially offset by 0.7% gain from acquired assets.
Segmental Revenues
Colfax reports its net sales under two heads/segments. The segmental results are briefly discussed below:
Revenues from Gas and Fluid Handling totaled $384.9 million, down 11% year over year. The decline was triggered by 9.3% fall in the existing businesses and 1.7% adverse impact from foreign currency translations.
Organically, sales declined 27.1% in oil, gas & petrochemical, 10.1% in power generation and 7.1% in general industrial & other end markets. These negatives were partially offset by 40.4% gain in mining and 10.2% gain in marine end markets.
The segment’s orders were worth $445.2 million at the end of the quarter, up 9.6% year over year. Backlog was $1,084.7 million.
Revenues from Fabrication Technology grew 3.6% year over year to $460 million due to 1.8% positive impact from price/mix, 1.4% gain from acquired assets and 1.1% positive impact from foreign currency translations, partially offset by 0.7% decline in volumes.
Margins
In the quarter, Colfax’s cost of sales decreased 5.2% year over year, representing 66.9% of net sales compared with 68% in the year-ago quarter. Gross margin increased 110 basis points (bps) year over year to 33.1%. Selling, general and administrative expenses, roughly 24.4% as a percentage of revenues, declined 3.9% year over year.
Adjusted operating income grew 10.9% year over year while margin grew 120 bps to 8.7%.
Balance Sheet and Cash Flow
Exiting the first quarter, Colfax had cash and cash equivalents of $207.8 million, down from $221.7 million recorded at previous quarter end. Long-term debt balance was down 3.3% sequentially to $1,244.9 million.
In the quarter, the company generated net cash of $40.4 million from its operating activities, up from $15.5 million generated in the year-ago quarter. Capital spending totaled $11.7 million, decreasing 23.9% year over year.
Outlook
For 2017, Colfax increased its adjusted earnings guidance to $1.60−$1.75 per share from the previous projection of $1.55−$1.70. Also, the company announced that it is on track to deliver roughly $50 million in cost savings from its restructuring efforts.
Colfax Corporation Price and Consensus
Colfax Corporation Price and Consensus | Colfax Corporation Quote
Zacks Rank & Key Picks
With a market capitalization of approximately $4.93 billion, Colfax currently carries a Zacks Rank #3 (Hold). 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.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>