A month has gone by since the last earnings report for VWR Corporation . Shares have lost about 3.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.
VWR Corp Beats on Q1 Earnings, Awaits Merger Closure
VWR Corporation reported first-quarter 2017 adjusted earnings per share (EPS) of $0.44, reflecting a 10% rise from the year-ago quarter. Earnings, however, surpassed the Zacks Consensus Estimate of $0.41. The year-over-year rise in earnings was primarily on account of strong top-line performance.
Including one-time items, the company reported first-quarter net EPS of $0.29, flat year over year.
Revenues in the reported quarter were up 3.7% year over year to $1.14 billion. The figure also surpassed the Zacks Consensus Estimate of $1.11 billion. On an organic basis, revenues increased 4.3%.
Revenues in the Americas totaled $692.8 million, up 3.9% year over year (up 1.7% organically) in the first quarter. The increase in the Americas net sales was driven by strong sales to industrial, healthcare and education customers.
EMEA-APAC revenues in the quarter were $446.3 million, up 3.4% year over year and 8.4% on an organic basis. Foreign exchange impacted sales by 4.8% while acquisition growth was 0.4% year over year. The disposition of the Australia/New Zealand business reduced revenues by 0.5%.
VWR reported first-quarter gross margin of 28.1%, down 21 basis points (bps) year over year due to a 4.0% rise in cost of goods sold to $819.4 million. Sales, general and administrative expenses rose 3.2% to $238.2 million. The company posted operating income of $81.5 million in the reported quarter, reflecting a 2.3% rise from the year-ago quarter. Operating margin contracted 11 bps to 7.2% in the quarter under review.
VWR exited the first quarter of 2017 with cash and cash equivalents of $141.5 million, down from $168.7 million at the end of fiscal 2016. As of Mar 31, 2016, operating cash flow was $66.5 million, compared with $42 million in the year-ago period.
Merger Update
Post its first-quarter earnings release, VWR inked a definitive agreement with Avantor, Inc. under which the latter will acquire VWR for an enterprise value of $6.4 billion. In view of this, VWR no longer plans to provide or update any financial guidance. The acquisition is expected to be complete by third-quarter 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VGM Scores
At this time, VWR Corp's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. 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.
Based on our scores, the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
Image: Bigstock
VWR Corp (VWR) Down 3.2% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for VWR Corporation . Shares have lost about 3.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.
VWR Corp Beats on Q1 Earnings, Awaits Merger Closure
VWR Corporation reported first-quarter 2017 adjusted earnings per share (EPS) of $0.44, reflecting a 10% rise from the year-ago quarter. Earnings, however, surpassed the Zacks Consensus Estimate of $0.41. The year-over-year rise in earnings was primarily on account of strong top-line performance.
Including one-time items, the company reported first-quarter net EPS of $0.29, flat year over year.
Revenues in the reported quarter were up 3.7% year over year to $1.14 billion. The figure also surpassed the Zacks Consensus Estimate of $1.11 billion. On an organic basis, revenues increased 4.3%.
Revenues in the Americas totaled $692.8 million, up 3.9% year over year (up 1.7% organically) in the first quarter. The increase in the Americas net sales was driven by strong sales to industrial, healthcare and education customers.
EMEA-APAC revenues in the quarter were $446.3 million, up 3.4% year over year and 8.4% on an organic basis. Foreign exchange impacted sales by 4.8% while acquisition growth was 0.4% year over year. The disposition of the Australia/New Zealand business reduced revenues by 0.5%.
VWR reported first-quarter gross margin of 28.1%, down 21 basis points (bps) year over year due to a 4.0% rise in cost of goods sold to $819.4 million. Sales, general and administrative expenses rose 3.2% to $238.2 million. The company posted operating income of $81.5 million in the reported quarter, reflecting a 2.3% rise from the year-ago quarter. Operating margin contracted 11 bps to 7.2% in the quarter under review.
VWR exited the first quarter of 2017 with cash and cash equivalents of $141.5 million, down from $168.7 million at the end of fiscal 2016. As of Mar 31, 2016, operating cash flow was $66.5 million, compared with $42 million in the year-ago period.
Merger Update
Post its first-quarter earnings release, VWR inked a definitive agreement with Avantor, Inc. under which the latter will acquire VWR for an enterprise value of $6.4 billion. In view of this, VWR no longer plans to provide or update any financial guidance. The acquisition is expected to be complete by third-quarter 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
VWR Corporation Price and Consensus
VWR Corporation Price and Consensus | VWR Corporation Quote
VGM Scores
At this time, VWR Corp's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. 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.
Based on our scores, the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.