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Machinery company, The Gorman-Rupp Company (GRC - Free Report) reported impressive results for the fourth quarter of 2017.
Earnings, before special items, came in at 31 cents per share, above 24 cents (the figure excludes the impact of 5 cents of non-cash impairment charge) recorded in the year-ago quarter.
For 2017, the company’s earnings, before special items, were $1.22 versus $1.00 in the previous year.
Revenues Grow on Solid Non-Water Sales
In the quarter, Gorman-Rupp’s net sales came in at $94.9 million, representing slight increase of 0.8% from the year-ago tally. However, the top line grew roughly 1.3% after excluding the sales of the New Orleans Permanent Canal Closures & Pumps (PCCP) project.
Excluding the PCCP project, the company’s domestic sales dipped 0.2% while international sales increased 4%.
Considering the sources, the company’s sales (excluding PCCP project) in larger water markets decreased 1.2% year over year as sales increases in the construction and fire protection markets were more-than offset by decline in the municipal and agriculture markets and fall in repair parts sales.
Sales in non-water markets increased 7.3% year over year on the back of sales growth in the industrial and Original Equipment Manufacturer (OEM) markets. The positives were partially offset by sales decline in the petroleum market.
Exiting the quarter, the company’s order backlog was $114 million versus $111.4 million recorded in the year-ago quarter. Incoming orders in the quarter grew 6% year over year.
For 2017, the company’s net sales of $379.4 million slipped 0.7% from the year-ago tally of $382.1 million.
Margin Improves
Gorman-Rupp’s margin profile improved in the quarter. Cost of goods sold decreased 1.8% year over year to $69 million while as a percentage of revenues it came in at 73.5% versus 75.3% in the prior-year quarter. Gross margin increased 180 basis points (bps) to 26.5%.
Selling, general and administrative expenses, as a percentage of revenues were 14.4% compared with 15.2% in the year-ago quarter. On a year-over-year basis, these expenses declined 4.6%.
Cash Balance & Dividend
Exiting the fourth quarter, Gorman-Rupp’s cash and cash equivalents were approximately $79.7 million, increasing 4.9% from $76 million recorded at third-quarter end.
Capital expenditures in 2017 totaled $7.8 million. During the fourth quarter, the company paid quarterly dividend of 12.5 cents per share to its shareholders. The quarterly rate represented an 8.7% increase over the previous dividend rate of 11.5 cents.
Outlook
For 2018, Gorman-Rupp anticipates gaining from healthy backlog and overall improving business conditions in majority of the end-markets served. However, weakness in the oil & gas and agriculture markets might be concerning. Capital spending, for purchasing more machinery and equipments, in the year is anticipated to be within $10-$15 million.
Also, the company anticipates favorable impacts from the U.S. Tax Cuts and Jobs Act.
Gorman-Rupp Company (The) Price, Consensus and EPS Surprise
Applied Industrial Technologies pulled off an average positive earnings surprise of 10.97% over the last four quarters. Also, earnings estimates for fiscal 2018 and fiscal 2019 were revised upward over the last 60 days.
Dover Corporation delivered an average positive earnings surprise of 7.26% in the trailing four quarters. Also, bottom-line expectations for 2018 and 2019 improved over the past 60 days.
Roper Technologies’ financial performance was impressive, with an average positive earnings surprise of 3.12% in the last four quarters. Also, earnings estimates for 2018 and 2019 were revised upward over the last 60 days.
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Gorman-Rupp's (GRC) Q4 Earnings Rise Y/Y, Margins Solid
Machinery company, The Gorman-Rupp Company (GRC - Free Report) reported impressive results for the fourth quarter of 2017.
Earnings, before special items, came in at 31 cents per share, above 24 cents (the figure excludes the impact of 5 cents of non-cash impairment charge) recorded in the year-ago quarter.
For 2017, the company’s earnings, before special items, were $1.22 versus $1.00 in the previous year.
Revenues Grow on Solid Non-Water Sales
In the quarter, Gorman-Rupp’s net sales came in at $94.9 million, representing slight increase of 0.8% from the year-ago tally. However, the top line grew roughly 1.3% after excluding the sales of the New Orleans Permanent Canal Closures & Pumps (PCCP) project.
Excluding the PCCP project, the company’s domestic sales dipped 0.2% while international sales increased 4%.
Considering the sources, the company’s sales (excluding PCCP project) in larger water markets decreased 1.2% year over year as sales increases in the construction and fire protection markets were more-than offset by decline in the municipal and agriculture markets and fall in repair parts sales.
Sales in non-water markets increased 7.3% year over year on the back of sales growth in the industrial and Original Equipment Manufacturer (OEM) markets. The positives were partially offset by sales decline in the petroleum market.
Exiting the quarter, the company’s order backlog was $114 million versus $111.4 million recorded in the year-ago quarter. Incoming orders in the quarter grew 6% year over year.
For 2017, the company’s net sales of $379.4 million slipped 0.7% from the year-ago tally of $382.1 million.
Margin Improves
Gorman-Rupp’s margin profile improved in the quarter. Cost of goods sold decreased 1.8% year over year to $69 million while as a percentage of revenues it came in at 73.5% versus 75.3% in the prior-year quarter. Gross margin increased 180 basis points (bps) to 26.5%.
Selling, general and administrative expenses, as a percentage of revenues were 14.4% compared with 15.2% in the year-ago quarter. On a year-over-year basis, these expenses declined 4.6%.
Cash Balance & Dividend
Exiting the fourth quarter, Gorman-Rupp’s cash and cash equivalents were approximately $79.7 million, increasing 4.9% from $76 million recorded at third-quarter end.
Capital expenditures in 2017 totaled $7.8 million. During the fourth quarter, the company paid quarterly dividend of 12.5 cents per share to its shareholders. The quarterly rate represented an 8.7% increase over the previous dividend rate of 11.5 cents.
Outlook
For 2018, Gorman-Rupp anticipates gaining from healthy backlog and overall improving business conditions in majority of the end-markets served. However, weakness in the oil & gas and agriculture markets might be concerning. Capital spending, for purchasing more machinery and equipments, in the year is anticipated to be within $10-$15 million.
Also, the company anticipates favorable impacts from the U.S. Tax Cuts and Jobs Act.
Gorman-Rupp Company (The) Price, Consensus and EPS Surprise
Gorman-Rupp Company (The) Price, Consensus and EPS Surprise | Gorman-Rupp Company (The) Quote
Key Picks
Gorman-Rupp Company has approximately $737 million of market capitalization. Few stocks in the industry sporting a Zacks Rank #1 (Strong Buy) are Applied Industrial Technologies, Inc. (AIT - Free Report) , Dover Corporation (DOV - Free Report) and Roper Technologies, Inc. (ROP - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies pulled off an average positive earnings surprise of 10.97% over the last four quarters. Also, earnings estimates for fiscal 2018 and fiscal 2019 were revised upward over the last 60 days.
Dover Corporation delivered an average positive earnings surprise of 7.26% in the trailing four quarters. Also, bottom-line expectations for 2018 and 2019 improved over the past 60 days.
Roper Technologies’ financial performance was impressive, with an average positive earnings surprise of 3.12% in the last four quarters. Also, earnings estimates for 2018 and 2019 were revised upward over the last 60 days.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>