A month has gone by since the last earnings report for Colfax Corporation . Shares have added about 7.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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.
Colfax Beats Q1 Earnings & Sales, Raises '17 View
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 $0.35 per share, above the Zacks Consensus Estimate of $0.30. Also, the bottom line grew 16.67% above the year-ago tally of $0.30.
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.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Colfax Corporation Price and Consensus
VGM Scores
At this time, the stock has a subpar Growth Score of 'D', while Momentum is doing a bit better with a 'C'. Charting the exact same path, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is equally suitable for value and momentum investors.
Outlook
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
Why Is Colfax (CFX) Up 7.4% Since the Last Earnings Report?
A month has gone by since the last earnings report for Colfax Corporation . Shares have added about 7.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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.
Colfax Beats Q1 Earnings & Sales, Raises '17 View
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 $0.35 per share, above the Zacks Consensus Estimate of $0.30. Also, the bottom line grew 16.67% above the year-ago tally of $0.30.
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.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Colfax Corporation Price and Consensus
Colfax Corporation Price and Consensus | Colfax Corporation Quote
VGM Scores
At this time, the stock has a subpar Growth Score of 'D', while Momentum is doing a bit better with a 'C'. Charting the exact same path, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is equally suitable for value and momentum investors.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.