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Luxfer (LXFR) Misses on Q4 Earnings, Up Y/Y on Solid Sales
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Luxfer Holdings PLC’s (LXFR - Free Report) results for fourth-quarter 2017 were below expectations. Adjusted earnings of 23 cents per share lagged the Zacks Consensus Estimate of 25 cents by 8%.
On a year-over-year basis, the quarter’s bottom line increased 64% from the year-ago tally of 14 cents. The results improved on the back of segmental sales growth and productivity enhancement.
For 2017, the machinery company’s adjusted earnings were $1.02 per share, up 10.9% year over year. However, the result was below the Zacks Consensus Estimate of $1.05.
Solid Segmental Results Drive Revenues
In the quarter, Luxfer generated revenues of $116.1 million, increasing roughly 20.8% year over year.
The company reports its top-line results under two segmental heads. Fourth-quarter segmental results are briefly discussed below:
Revenues from the Gas Cylinders division were roughly $54.8 million, up 6% year over year, driven by rising number of aluminum cylinders sold. It represented 47.2% of the quarter’s revenues.
The Elektron division generated revenues of $61.3 million, up 38.1% year over year on the back of higher sales for disaster-relief and defense products. It accounted for 52.8% of the quarter’s revenues.
For 2017, revenues totaled $441.3 million, up 6.4% from the previous year’s tally of $414.8 million.
Margins Improve Despite Higher Costs & Expenses
In the fourth quarter, Luxfer Holdings’ cost of sales increased 14.8% year over year to $89 million. It represented 76.7% of the quarter’s revenues versus 80.6% in the year-ago tally. Gross margin improved by 390 basis points (bps) to 23.3%. Distribution and administrative expenses stood at 2.1% and 13.9% of revenues, respectively. On a year-over-year basis, distribution expenses grew 26.3% while administrative expenses expanded 34.2%.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter were $14.6 million, above $10.2 million in the year-ago quarter. EBITDA improved 200 bps to 12.6%.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Luxfer had cash and cash equivalents of $13.3 million, below $19.2 million in the preceding quarter-end. Bank and other loans were $93.8 million versus $105.7 million in the previous quarter.
In the quarter, the company generated net cash of $16.3 million, up 73.4% from the year-ago tally of $9.4 million. Capital expenditure was down 64.3% year over year to $2.8 million. Dividend distributed during the quarter amounted to $3.4 million.
Exiting the year, the company is left with the authorization to repurchase $1.6 million shares.
Outlook
For 2018, Luxfer anticipates positive momentum, witnessed in the second half of 2017, to continue benefiting in 2018. Growth in sales of Aluminum and SCBA cylinders will boost the Gas Cylinders division’s results while the Elektron division will gain from higher sales of magnesium (high-performance) and zirconium alloys.
In addition, the company’s transformation plan and lower tax rates will yield benefits in the year. Accounting for these positive aspects, the company anticipates adjusted earnings per share growth to be 10-15%.
With a market capitalization of $399 million, Luxfer presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Dover Corporation (DOV - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Graco Inc. (GGG - Free Report) . While Dover sports a Zacks Rank #1 (Strong Buy), both Applied Industrial and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for each of these stocks improved for the current year and the next year. Also, average positive earnings surprise for the last four quarters was 7.26% for Dover, 10.97% for Applied Industrial and 18.54% for Graco.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Luxfer (LXFR) Misses on Q4 Earnings, Up Y/Y on Solid Sales
Luxfer Holdings PLC’s (LXFR - Free Report) results for fourth-quarter 2017 were below expectations. Adjusted earnings of 23 cents per share lagged the Zacks Consensus Estimate of 25 cents by 8%.
On a year-over-year basis, the quarter’s bottom line increased 64% from the year-ago tally of 14 cents. The results improved on the back of segmental sales growth and productivity enhancement.
For 2017, the machinery company’s adjusted earnings were $1.02 per share, up 10.9% year over year. However, the result was below the Zacks Consensus Estimate of $1.05.
Solid Segmental Results Drive Revenues
In the quarter, Luxfer generated revenues of $116.1 million, increasing roughly 20.8% year over year.
The company reports its top-line results under two segmental heads. Fourth-quarter segmental results are briefly discussed below:
Revenues from the Gas Cylinders division were roughly $54.8 million, up 6% year over year, driven by rising number of aluminum cylinders sold. It represented 47.2% of the quarter’s revenues.
The Elektron division generated revenues of $61.3 million, up 38.1% year over year on the back of higher sales for disaster-relief and defense products. It accounted for 52.8% of the quarter’s revenues.
For 2017, revenues totaled $441.3 million, up 6.4% from the previous year’s tally of $414.8 million.
Margins Improve Despite Higher Costs & Expenses
In the fourth quarter, Luxfer Holdings’ cost of sales increased 14.8% year over year to $89 million. It represented 76.7% of the quarter’s revenues versus 80.6% in the year-ago tally. Gross margin improved by 390 basis points (bps) to 23.3%. Distribution and administrative expenses stood at 2.1% and 13.9% of revenues, respectively. On a year-over-year basis, distribution expenses grew 26.3% while administrative expenses expanded 34.2%.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter were $14.6 million, above $10.2 million in the year-ago quarter. EBITDA improved 200 bps to 12.6%.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Luxfer had cash and cash equivalents of $13.3 million, below $19.2 million in the preceding quarter-end. Bank and other loans were $93.8 million versus $105.7 million in the previous quarter.
In the quarter, the company generated net cash of $16.3 million, up 73.4% from the year-ago tally of $9.4 million. Capital expenditure was down 64.3% year over year to $2.8 million. Dividend distributed during the quarter amounted to $3.4 million.
Exiting the year, the company is left with the authorization to repurchase $1.6 million shares.
Outlook
For 2018, Luxfer anticipates positive momentum, witnessed in the second half of 2017, to continue benefiting in 2018. Growth in sales of Aluminum and SCBA cylinders will boost the Gas Cylinders division’s results while the Elektron division will gain from higher sales of magnesium (high-performance) and zirconium alloys.
In addition, the company’s transformation plan and lower tax rates will yield benefits in the year. Accounting for these positive aspects, the company anticipates adjusted earnings per share growth to be 10-15%.
Luxfer Holdings PLC Price and Consensus
Luxfer Holdings PLC Price and Consensus | Luxfer Holdings PLC Quote
Zacks Rank & Key Picks
With a market capitalization of $399 million, Luxfer presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Dover Corporation (DOV - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Graco Inc. (GGG - Free Report) . While Dover sports a Zacks Rank #1 (Strong Buy), both Applied Industrial and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for each of these stocks improved for the current year and the next year. Also, average positive earnings surprise for the last four quarters was 7.26% for Dover, 10.97% for Applied Industrial and 18.54% for Graco.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>