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Actuant Corporation reported mixed fourth-quarter fiscal 2017 (ended Aug 31, 2017) results. The company claimed that benefits accrued from robust performance of both Industrial and Engineered Solutions’ segments were offset by weak Energy segment results.
Earnings
Quarterly adjusted earnings came in at 19 cents per share, lower than the Zacks Consensus Estimate of 21 cents. The bottom-line also fell short of the year-ago tally of 30 cents per share.
Adjusted earnings for fiscal 2017 was 83 cents per share compared to $1.22 recorded in the year-ago comparable period.
Revenues
Net sales in the reported quarter was $275.7 million, higher than the Zacks Consensus Estimate of $266 million. However, the top-line slightly fell short of the year ago tally of $275.8 million.
Net sales for fiscal 2017 was $1,095.8 million compared to $1,149.4 million recorded in the year-ago period.
Segment Details
Industrial segment’s sales during the quarter came in at $100.3 million, climbing 6.7% year over year. The upside was driven by sturdy demand for industrial tool across all key end-markets. Core sales of the segment grew 5% year over year, primarily on the back of weaker U.S. dollar.
Engineered Solutions segment’s revenues were $106.8 million, up 18.3% year over year. The upside was stemmed by solid customer production rates in almost all the off-highway markets. In addition, the Chinese heavy-duty truck original equipment manufacturer’s demand remained robust during the reported quarter. Core sales of the segment improved 20% year over year, on the back of Sanlo spin-off as well as favorable foreign currency translation impact.
Energy segment’s sales came in at $68.6 million, dropping 24.9% year over year. Core sales of the segment also dipped 25% year over year. Poor upstream offshore oil & gas demand, as well as lower sales accrued from the company’s Hydratight business, dented the segment’s sales in the quarter.
Costs and Margins
Cost of goods sold in the fiscal fourth quarter declined inched down 0.2% year over year to $179.2 million. Gross profit margin in the quarter came in at 35%, up 10 basis points (bps) year over year.
Selling, administrative and engineering expenses were $71.9 million, up 11.8% year over year.
Adjusted operating profit margin was 7.1%, down 250 bps year over year.
Gross margin for fiscal 2017 was 34.7% compared to 35.1% recorded in the year-ago period. While adjusted operating margin for fiscal 2017 was 7.5%, down 170 bps year over year.
Balance Sheet and Cash Flow
Existing fiscal 2017, Actuant had cash and cash equivalents worth $229.6 million, higher than $179.6 million recorded at the end of fiscal 2016. Long-term debt totaled $531.9 million, down from $561.7 million recorded on Aug 31, 2016.
In the quarter under review, Actuant provided cash worth $36.4 million from operating activities, down 14.7% year over year. Capital expenditures came in at $5.3 million compared to $4.6 million registered in the year-ago quarter.
Outlook
Actuant intends to boost its near-term results on the back of lean revitalization, sales effectiveness, and portfolio actions. The company anticipates to report revenues within $260-$270 million and adjusted earnings within 14-19 cents in in first-quarter fiscal 2018.
The company anticipates to report revenues within the range of $1.100-1.130 billion in fiscal 2018, estimating a core sales rise of 2%. Adjusted earnings for fiscal 2018 is anticipated to lie within the range of $1.05-$1.15 per share.
Actuant is steadily reinforcing its business with strategic commercial effectiveness actions and lean revitalization moves. Moreover, near-term profitability and cash flow will likely improve on the back of the sound restructuring moves.
However, we believe that challenging conditions prevalent in the global energy market might hurt Actuant’s top- and bottom-line performances going forward. In addition, the company believes a stronger U.S. dollar might dent its overseas’ revenues and profitability in the near term.
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Actuant Corporation (ATU) Misses Q4 Earnings, Revenues Beat
Actuant Corporation reported mixed fourth-quarter fiscal 2017 (ended Aug 31, 2017) results. The company claimed that benefits accrued from robust performance of both Industrial and Engineered Solutions’ segments were offset by weak Energy segment results.
Earnings
Quarterly adjusted earnings came in at 19 cents per share, lower than the Zacks Consensus Estimate of 21 cents. The bottom-line also fell short of the year-ago tally of 30 cents per share.
Adjusted earnings for fiscal 2017 was 83 cents per share compared to $1.22 recorded in the year-ago comparable period.
Revenues
Net sales in the reported quarter was $275.7 million, higher than the Zacks Consensus Estimate of $266 million. However, the top-line slightly fell short of the year ago tally of $275.8 million.
Net sales for fiscal 2017 was $1,095.8 million compared to $1,149.4 million recorded in the year-ago period.
Segment Details
Industrial segment’s sales during the quarter came in at $100.3 million, climbing 6.7% year over year. The upside was driven by sturdy demand for industrial tool across all key end-markets. Core sales of the segment grew 5% year over year, primarily on the back of weaker U.S. dollar.
Engineered Solutions segment’s revenues were $106.8 million, up 18.3% year over year. The upside was stemmed by solid customer production rates in almost all the off-highway markets. In addition, the Chinese heavy-duty truck original equipment manufacturer’s demand remained robust during the reported quarter. Core sales of the segment improved 20% year over year, on the back of Sanlo spin-off as well as favorable foreign currency translation impact.
Energy segment’s sales came in at $68.6 million, dropping 24.9% year over year. Core sales of the segment also dipped 25% year over year. Poor upstream offshore oil & gas demand, as well as lower sales accrued from the company’s Hydratight business, dented the segment’s sales in the quarter.
Costs and Margins
Cost of goods sold in the fiscal fourth quarter declined inched down 0.2% year over year to $179.2 million. Gross profit margin in the quarter came in at 35%, up 10 basis points (bps) year over year.
Selling, administrative and engineering expenses were $71.9 million, up 11.8% year over year.
Adjusted operating profit margin was 7.1%, down 250 bps year over year.
Gross margin for fiscal 2017 was 34.7% compared to 35.1% recorded in the year-ago period. While adjusted operating margin for fiscal 2017 was 7.5%, down 170 bps year over year.
Balance Sheet and Cash Flow
Existing fiscal 2017, Actuant had cash and cash equivalents worth $229.6 million, higher than $179.6 million recorded at the end of fiscal 2016. Long-term debt totaled $531.9 million, down from $561.7 million recorded on Aug 31, 2016.
In the quarter under review, Actuant provided cash worth $36.4 million from operating activities, down 14.7% year over year. Capital expenditures came in at $5.3 million compared to $4.6 million registered in the year-ago quarter.
Outlook
Actuant intends to boost its near-term results on the back of lean revitalization, sales effectiveness, and portfolio actions. The company anticipates to report revenues within $260-$270 million and adjusted earnings within 14-19 cents in in first-quarter fiscal 2018.
The company anticipates to report revenues within the range of $1.100-1.130 billion in fiscal 2018, estimating a core sales rise of 2%. Adjusted earnings for fiscal 2018 is anticipated to lie within the range of $1.05-$1.15 per share.
Our Take
Actuant conducts business in the highly competitive the Manufacturing-Tools & Related Products industry. Lincoln Electric Holdings, Inc. (LECO - Free Report) , Sandvik AB (SDVKY - Free Report) and Stanley Black & Decker, Inc. (SWK - Free Report) are some major companies dominating this industry.
Actuant is steadily reinforcing its business with strategic commercial effectiveness actions and lean revitalization moves. Moreover, near-term profitability and cash flow will likely improve on the back of the sound restructuring moves.
However, we believe that challenging conditions prevalent in the global energy market might hurt Actuant’s top- and bottom-line performances going forward. In addition, the company believes a stronger U.S. dollar might dent its overseas’ revenues and profitability in the near term.
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.
See This Ticker Free >>