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Milacron (MCRN) Tops Q2 Earnings & Revenues on Order Growth
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Milacron Holdings Corp reported second-quarter fiscal 2017 adjusted earnings per share of 46 cents, a 12% increase year over year and also surpassed the Zacks Consensus Estimate of 41 cents. The improved performance was aided by continued orders and sales momentum, along with strong performance in Melt Delivery and Control Systems and Fluids businesses. Further, Advanced Plastic Processing Technologies’ aftermarket business helped deliver the performance.
Including one-time items, the company reported earnings per share of 14 cents in the quarter compared with 18 cents per share in the year-ago quarter.
Operational Update
Milacron’s revenues inched up 0.4% to $309 million from the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $306 million. Excluding the unfavorable impact of foreign currency, sales for the quarter increased 1.4% from the prior-year quarter.
Cost of sales during the quarter went up 2.3% year over year to $205 million compared with the prior-year quarter. Gross profit declined 3% year over year to $103.8 million with gross margin contracting 120 basis points to 33.6%.
Selling, general and administrative expenses increased 1% year over year to $64.5 million. Milacron reported adjusted operating profit of $34.6 million which decreased 3% from $35.7 million in the year-ago quarter. Adjusted EBITDA went up 3.1% to $59.6 million for the quarter from $57.8 million in the prior-year quarter.
Milacron Holdings Corp. Price, Consensus and EPS Surprise
Advanced Plastic Processing Technologies: Net sales declined 7.1% year over year to $166 million. Excluding $0.2 million of unfavorable effects of currency movements, sales decreased 7.2% in the prior-year quarter. Adjusted EBITDA decreased 14.2% year over year to $20 million.
Melt Delivery and Control Systems: Net sales went up 12% year over year to $112 million. Excluding unfavorable influence of currency movements of $2.9 million, sales advanced 14.7% in the prior-year period. Adjusted EBITDA improved 21.5% to $40.1 million.
Fluid Technologies: Net sales went up 7% year over year to $30.5 million. Sales improved 8.7% in the prior-year period, excluding $0.6 million of unfavorable effects of currency movements. Adjusted EBITDA increased 6.2% to $6.9 million.
Financial Update
As of Jun 30, 2017, Milacron had cash and cash equivalents of $94 million compared with $130.2 million as of Dec 31, 2016. The company used $1.4 million of cash in operating activities in the first half of 2017 compared with cash inflow of $49.4 million in the prior-year comparable period. Long-term debt was $920.9 million as of Jun 30, 2017, compared with $934 million as of Dec 31, 2016.
Outlook
For fiscal 2017, Milacron reaffirmed organic sales growth guidance of 0–2%. Adjusted EBITDA is forecasted to be between $219 million and $225 million. Free Cash Flow (before restructuring) is expected to lie between $90 million and $100 million.
In the past six months, Milacron has outperformed industry. Its shares rose 7.0%, ahead of the industry’s rise of 5.7%.
AGCO has an earnings ESP of 39.70% for the trailing four quarters. Terex has an average earnings surprise of 122.61% for the last four quarters, while Deere has an average earnings surprise of 70.41% in the past four quarters.
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Milacron (MCRN) Tops Q2 Earnings & Revenues on Order Growth
Milacron Holdings Corp reported second-quarter fiscal 2017 adjusted earnings per share of 46 cents, a 12% increase year over year and also surpassed the Zacks Consensus Estimate of 41 cents. The improved performance was aided by continued orders and sales momentum, along with strong performance in Melt Delivery and Control Systems and Fluids businesses. Further, Advanced Plastic Processing Technologies’ aftermarket business helped deliver the performance.
Including one-time items, the company reported earnings per share of 14 cents in the quarter compared with 18 cents per share in the year-ago quarter.
Operational Update
Milacron’s revenues inched up 0.4% to $309 million from the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $306 million. Excluding the unfavorable impact of foreign currency, sales for the quarter increased 1.4% from the prior-year quarter.
Cost of sales during the quarter went up 2.3% year over year to $205 million compared with the prior-year quarter. Gross profit declined 3% year over year to $103.8 million with gross margin contracting 120 basis points to 33.6%.
Selling, general and administrative expenses increased 1% year over year to $64.5 million. Milacron reported adjusted operating profit of $34.6 million which decreased 3% from $35.7 million in the year-ago quarter. Adjusted EBITDA went up 3.1% to $59.6 million for the quarter from $57.8 million in the prior-year quarter.
Milacron Holdings Corp. Price, Consensus and EPS Surprise
Milacron Holdings Corp. Price, Consensus and EPS Surprise | Milacron Holdings Corp. Quote
Segment Results
Advanced Plastic Processing Technologies: Net sales declined 7.1% year over year to $166 million. Excluding $0.2 million of unfavorable effects of currency movements, sales decreased 7.2% in the prior-year quarter. Adjusted EBITDA decreased 14.2% year over year to $20 million.
Melt Delivery and Control Systems: Net sales went up 12% year over year to $112 million. Excluding unfavorable influence of currency movements of $2.9 million, sales advanced 14.7% in the prior-year period. Adjusted EBITDA improved 21.5% to $40.1 million.
Fluid Technologies: Net sales went up 7% year over year to $30.5 million. Sales improved 8.7% in the prior-year period, excluding $0.6 million of unfavorable effects of currency movements. Adjusted EBITDA increased 6.2% to $6.9 million.
Financial Update
As of Jun 30, 2017, Milacron had cash and cash equivalents of $94 million compared with $130.2 million as of Dec 31, 2016. The company used $1.4 million of cash in operating activities in the first half of 2017 compared with cash inflow of $49.4 million in the prior-year comparable period. Long-term debt was $920.9 million as of Jun 30, 2017, compared with $934 million as of Dec 31, 2016.
Outlook
For fiscal 2017, Milacron reaffirmed organic sales growth guidance of 0–2%. Adjusted EBITDA is forecasted to be between $219 million and $225 million. Free Cash Flow (before restructuring) is expected to lie between $90 million and $100 million.
In the past six months, Milacron has outperformed industry. Its shares rose 7.0%, ahead of the industry’s rise of 5.7%.
Milacron currently sports a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth considering in the sector include AGCO Corporation (AGCO - Free Report) , Terex Corporation (TEX - Free Report) and Deere & Company (DE - Free Report) . All three stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO has an earnings ESP of 39.70% for the trailing four quarters. Terex has an average earnings surprise of 122.61% for the last four quarters, while Deere has an average earnings surprise of 70.41% in the past four quarters.
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.
It's not the one you think.
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